An example of behavior that antitrust laws prohibit is lowering the price in a certain geographic area in order to push out the competition. For example, a large company sells widgets for $1.00 each throughout the country. Another company goes into business and sells widgets just in California or $.90 each. In response, the first company lowers their prices just in California to $.80. They’re selling the widgets at a loss just in that state just to push out the new competitor. The second company goes out of business. The first company likely violated antitrust laws by using their large status to lower prices in just one area in order to attack the competition.
Antitrust Law Blog
On December 12, 2018, the Eleventh Circuit Court of Appeals denied defendants Blue Cross Blue Shield Association’s interlocutory appeal of a District Court decision to analyze BCBS’s geographic market distribution system under the per se rule rather than the rule of reason. Judge R. David Proctor of the Northern District of Alabama certified BCBS’s interlocutory appeal back in June because his decision to proceed under the per se standard of review “involves a controlling question of law as to which there is substantial ground for difference of opinion.” But rather than resolve the substantive legal issue at hand, the Eleventh Circuit issued a one sentence order denying “Defendants’ petition to appeal.” The parties did not seek to stay the case pending appeal and the underlying action has been moving forward. Continue Reading
In order to understand the legislation Congress passed to curb the autonomy of big business, it is first necessary to understand the methods such businesses used to control the market. One of the first industries to use such business practices was the railroad industry. The first method it used to eliminate competition was known as the "pool." A pool was an agreement between companies in a particular industry to maintain a certain price or to divide the market.1 This eliminated competition and allowed the railroads to charge whatever rates they wanted. Conditions were such that a farmer would have to spend his entire earnings just to send his crops to market. Also, railroads would charge more for transporting goods a short distance than they would for a long one. The reason for this was that over a long distance they needed to cut rates to keep up with the competition from other railroad lines. When only traveling a short distance, there was most likely only one line that traveled the route and farmers were forced to pay whatever rate that particular railroad was charging. In order to get more business, railroads would also refund money to big business owners who used their lines. Such refunds were known as rebates. Since these businesses paid less to transport their goods, they could sell them at a cheaper rate than small business owners thus driving the small business owners out of business.2 Other practices used by big business included vertical integration, horizontal integration, trusts, interlocking directorates, and holding companies. Vertical integration occurred when one business controlled all industries involved in making a product from the raw materials to the finished consumer version. In a...
What Are Antitrust Laws?
Vertical Mergers. Mergers between buyers and sellers can improve cost savings and business synergies, which can translate to competitive prices for consumers. But when the vertical merger can have a negative effect on competition due to a competitor’s inability to access supplies, the FTC may require certain provisions prior to the completion of the merger. For example, Valero Energy had to divest certain businesses and form an informational firewall when it acquired an ethanol terminator operator.
An important part of estate planning is to assign an “estate tax value” to every asset, including interests in real estate and businesses. Assigning the proper value to assets is more complex than you might think. And, if you don’t take full advantage of certain value reducing techniques, you can wind up paying tens of thousands of dollars more in taxes than necessary. In this post, I discuss some of the factors in valuing assets. Read more
In the United States, these types of laws essentially began with the Sherman Antitrust Act of 1890, which applied to interstate transactions. It removed limits on competitive trade and made it illegal to form a monopoly or attempt to monopolize a market. The Clayton Act, which was passed in 1914, regulates against mergers or acquisitions that would substantially decrease competition or might create a monopoly. In 1936, the Robinson–Patman Act made it illegal for producers to engage in price discrimination by allowing some businesses to purchase products at lower prices than other businesses. Various other laws also encourage fair competition in the marketplace.
Washington, D.C. Lawyers Specializing in Antitrust, International Trade, and Employment Law
Doyle Barlow & Mazard ("DBM") is a specialty boutique antitrust, international trade firm, and employment law firm. Our Washington, DC antitrust and international trade lawyers offer distinct advantages over larger full service general practice firms. Our smaller team allows us to be more responsive to client needs. We bring more focus to the subject area and a lot more flexibility in terms of the arrangements that we have with our clients. DBM represents domestic and international companies and financial institutions regarding private and government antitrust investigations and litigation, including merger and acquisition matters, international trade issues, and a broad array of employment and hospitality matters. But, we do not have the same restrictions that larger firms have.
Mises Daily Articles
Judge Thomas Penfield Jackson, the grossly biased judge in the Microsoft case, has frequently compared Bill Gates to John D. Rockefeller, thereby perpetuating another statist myth -- that Rockefeller’s Standard Oil Company was a "monopoly." But Standard Oil caused the price of refined petroleum to fall from over 30 cents per gallon in 1869 to 5.9 cents by 1897 while stimulating an enormous amount of innovation in the industry, just as Microsoft has stimulated innovation in today’s computer industry. For this great service to consumers, Rockefeller was prosecuted and forced to break up his company.