Antitrust

Antitrust refers to the regulation of the concentration of economic power, particularly with regard to trusts and monopolies. Antitrust laws exist as both  federal statutes and state statutes. The three key federal statutes in Antitrust Law are the Sherman Act Section 1, the Sherman Act Section 2, and the Clayton Act. Section 1 delineates and prohibits specific means of anticompetitive conduct, and Section 2 deals with end results that are anti-competitive in nature. Sections 1 and 2 supplement each other in an effort to outlaw all types of anticompetitive conduct. The Clayton Act regulates the mergers or acquisition of the companies together with the guidelines published by the Department of Justice and the Federal Trade Commission. As for the states, many have adopted antitrust statutes that parallel the Sherman Antitrust Act to prevent anticompetitive behavior within individual states.

Penalties for violating the Sherman Act can be both criminal and civil (most enforcement actions are civil). Criminal prosecutions are limited to intentional and clear violations (ex. price-fixing and rig bids). Criminal penalties for corporations can reach up to $100 million and $1 million for individuals with up to 10 years in prison. Additionally, the maximum fine may be increased to twice the amount the conspirators gained from the illegal act or twice the amount of money lost by the victims of the crime if either of those amounts is over $100 million.

See also Antitrust Laws.

[Last updated in May of 2020 by the Wex Definitions Team]