Antitrust laws exist to promote competitive marketplaces. The main intent of antitrust laws is to protect consumers by ensuring there is healthy competition among businesses across all types of markets. That competition supports benefits for consumers such as more choices, better pricing, and increased innovation.
As a business owner, it’s also important to understand antitrust laws in Georgia. Some of these laws help protect opportunities for small and mid-sized businesses because they keep larger corporations from swallowing up all the competition.
Find out more about antitrust laws in Georgia below. Then learn how a business lawyer can help if you have questions about these laws or believe unlawful mergers or other illegal activity are occurring in your market.
What Laws Govern Fair Business Practices in Georgia?
The antitrust laws relevant in Georgia include three federal laws and a few state laws.
The Sherman Act
Originally passed in 1890, the Sherman Antitrust Act prohibits businesses from colluding in any way to create a monopoly in certain markets. That means businesses cannot merge or purchase their way into a role in a market that would allow them to dictate or control prices across that entire market. The Sherman Act also prohibits any type of contract or business process that might restrict trade.
Violating the Sherman Act can lead to some pretty hefty penalties. The fines for violations can be up to $100 million for a corporation. Individuals who are found in violation of the act may be penalized with a fine of up to $1 million. While enforcement of and penalties related to the Sherman Act are more often civil in nature, the act does allow criminal prosecution in some cases. Those who are convicted of crimes under the Sherman Act can face up to 10 years in prison.
The Clayton Act
The Clayton Act was originally passed in 1914. It adds more regulation to keep large businesses from engaging in unfair or predatory practices in the markets. Some of the things the Clayon Act prohibits include some types of price-cutting strategies, shipping agreements that are discriminatory, and sales contracts that are too restrictive.
The Clayton Act provides some remedies for private companies that have been injured by trust behaviors in the market. If a business believes its revenues or overall health have been harmed due to actions that violate the Clayton Act, the business may be able to sue the offending company. In some cases, the suing business may be able to seek compensation equal to up to three times the damages.
The Federal Trade Commission Act
The Federal Trade Commission Act is the law that created and empowered the Federal Trade Commission. One of the powers that the FTCA provides to the Commission is to regulate business activity in such a way as to help prevent unfair practices and promote healthy competition in the marketplace.
State Antitrust Laws in Georgia
State laws that apply to antitrust considerations are included in the Fair Business Practices Act and the Uniform Deceptive Trade Practices Act. These mainly apply to real estate transactions and antitrust lawsuits that involve real estate. State antitrust laws are often meant to support or complement the federal laws discussed above.
What Is Considered a Trust Under Antitrust Laws?
Antitrust laws are complex and they don’t always list specific activities that are illegal. In many cases, what is or isn’t considered activity that would restrain trade is somewhat subjective. It takes businesses or individuals pointing out the activity and filling a lawsuit to ensure that the courts can make a decision on the matter.
However, antitrust laws discourage or prohibit business activity that:
- Purposefully seeks to limit trade or competition in the market
- Creates substantial power and influence for one company in the market
- Seeks to unfairly control factors such as supply or price in a market
What Is an Antitrust Lawsuit?
Antitrust lawsuits are typically filed by businesses that are impacted by the type of activity listed above. If one or two larger corporations are limiting competition or trade in the market, smaller businesses might file an antitrust lawsuit. While individual people or companies may file such lawsuits, it’s also common for these lawsuits to become class actions representing multiple smaller businesses that are impacted.
An example of an antitrust lawsuit can be seen with AT&T in the late 20th century. The company was accused of monopolizing the telecommunications market at that time. Eventually, the case was settled when AT&T was broken up into seven smaller companies. This is actually how Verizon was formed—it was once a part of AT&T.
How Can InPrime Help?
Antitrust laws are just one of the many legal considerations businesses should factor in when making decisions. Whether you’re a small business wondering how to take on the competition or a large business considering your next merger or acquisition, it’s important to be aware of how antitrust laws impact companies in Georgia.
InPrime can help you make strong decisions to support your business goals while ensuring you’re well protected by the law. Our business coaching services help you create business plans that support your mission and core values while creating a strong foundation for the future. Contact InPrime Legal today to find out more.