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Antitrust

Definition and history


Antitrust refers to government policy to regulate or break up monopolies in order to
promote free competition and attain the benefits that such competition can provide to the
economy and to society as a whole.
The term antitrust originated from the fact that such policy was first used in the U.S.
with regard to a particular form of monopoly called trusts. A trust was an arrangement by
which stockholders in several companies transferred their shares to a single set of trustees. In
exchange, the stockholders received a certificate entitling them to a specified share of the
consolidated earnings of the jointly managed companies. The trusts came to dominate a large
number of major industries in the latter part of the nineteenth century, among the largest and
most notorious of which were coal, meatpacking, oil, railroads, steel, sugar and tobacco.
The first federal legislation in the U.S. with regard to trusts was the Sherman Antitrust
Act of 1890. However, it was not until 1904 that it was applied successfully, due to the
vigorous opposition from the powerful trusts, which controlled many politicians. This success
came about when the Supreme Court upheld the federal government's suit to dissolve the
Northern Securities Company (a railroad holding company) in the case State of Minnesota v.
Northern Securities Company.
Factor implementation of antitrust
1. Price- fixing : A usually illegal process of artificially dictating prices, rather than
allowing the market and consumers determine prices through supply and demand - Se
2. Carry prison terms for executives
3. Significant criminal fines for the company
Agencies Involved
1. The Department of Justice (DOJ): investigates antitrust matters and is authorized to
convene a grand jury to indict suspects.
2. The Federal Trade Commission (FTC) is the federal agency that seeks to promote free
and fair competition in interstate commerce. The FTC is tasked with many consumer
protection duties, as well. It has exclusive jurisdiction to prohibit unfair competition
and unfair or deceptive acts.
Anti trust Punishment

Anti trust punishment can divided b can divided by two which is criminal punishment and
civil punishment.

Civil Antitrust Punishments

An antitrust offender sued in the civil courts faces paying three times the proven harm
caused by the offence (i.e. damages), including all associated legal fees and costs.
Given the bare-boned antitrust statutes, points of theory, so called antitrust economics,
often carry large weight within US antitrust cases. These theoretical points rest with the
law professors and economists, whose cost is also borne by the offender. Whats more,
an antitrust defendant, even if their case prevails, cannot recover legal costs unless the
case can be demonstrated to be frivolous which is not easy nor common. During the
course of a trial, the antitrust offender may even be ordered to suspend certain business
practices while legal proceedings are in progression. Worse yet, should the claimant
emerge victorious, this temporary suspension could be made permanent. This is known
as the antitrust offender being enjoined.
Anti- competitive behaviour in business is not unusual and can happen to anybody quite
easily, in fact, corporations often do not realise they have acted in conflict with US
antitrust laws. These outcomes show the importance of obtaining the best legal advice at
the earliest possible stage. Established US antitrust professionals Kirkland & Ellis have
over a centurys worth of expertise in representing both claimants and defendants in high
profile US antitrust cases.

Criminal antitrust punishments

Criminal prosecutions principally concern price-fixing, horizontal market allocations, bidrigging and other antitrust wrongdoing. The government must prove each element of the
alleged offence beyond a reasonable doubt and must prove the defendant acted with criminal
intent. At the most serious level, the alleged offenders of the per se violations of Section 1 of
the Sherman Act may see their directors and employees personally charged, tried and
convicted. Found guilty, corporates can be ordered to pay enormous restitution costs and
fines, whereas an individual could face both of these including up to ten year in federal
prison.
Civil punishment:
Damages x3
Legal fees and costs

Experts costs
Enjoinment
Criminal punishment:
Enormous restitution costs
Fines
+ individuals face up to 10yrs in federal prison

Referencen
http://www.linfo.org/antitrust.html
http://www.legal.worldfinance.com/what-is-antitrust/

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