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A high-level overview of federal antitrust laws

Antitrust laws are something any business owner should be familiar with. Understanding how these laws might apply to you helps you stay clear of legal entanglements or assert your rights if you believe another business is creating a monopoly. Here's a quick primer on the three antitrust laws that make up the core federal legislation on the matter.

The Sherman Act restricts unreasonable restraint of trade. One company's agreement with a vendor company does cause a restraint of trade, but it's not an unreasonable one; it's the type of agreement that is required for business to run. If an action or agreement restricts trade so as to be unreasonably harmful to the competition, however, it is usually considered to be illegal under this act. Penalties for violations can be both civil and criminal.

The Clayton Act enforces some restrictions in areas such as mergers. Mergers are a type of activity that can restrict business, but they aren't necessarily illegal. If a merger creates a type of monopoly or creates restrictions that substantially lesson competition in the market, though, they could be prohibited under this act.

Finally, the Federal Trade Commission Act makes certain deceptive or unfair acts illegal. The FTC is the only entity that can bring an action under this law, though. In some cases, the FTC can bring action under this law simultaneous to an action being brought under the Sherman Act, since any violation of the Sherman Act is a violation of the FTC Act.

If you want to make sure your business is in line with these federal acts, consider working with a business law attorney. A professional can also help you understand if you have a civil case against another entity under antitrust laws.

Source: Federal Trade Commission, "The Antitrust Laws," accessed March 17, 2017

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