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ANTI-TRUST INVESTIGATIONS

In addition to the rules applied by the New York State Attorney General’s office, businesses must also be concerned about federal anti-trust legislation which is primarily found in the Sherman Anti-Trust Act. Anti-trust laws are designed to protect consumers from unfair business practices including:

Price fixing – when a significant number of business enterprises in a specific industry group together to set pricing at a certain level they may be accused of price fixing. For example, if a consumer wishes to have a phone offered by AT&T and Verizon is charging more or less for that same phone, there is no price fixing. However, if the consumer finds each carrier is offering exactly the same phone at the same price there may be price fixing.
Bid rigging – generally speaking, when a town, city or municipality needs work done it will issue a job description and request bids. Bid rigging occurs when the companies who are able to bid on a job band together and determine which one will provide the most competitive bid ensuring they get the job. This may occur for construction projects, purchase of materials or the provision of specific services.
Market allocation – when manufacturers or retailers of specific products agree to not compete with each other for a share of the consumer market they may be engaging in the practice of market allocation. Effectively, this results in only one company being allowed to sell or provide a service or product in an area. This may occur in manufacturing, retail or wholesale businesses and with service providers.
Resale price maintenance – this practice occurs when a manufacturer or wholesaler insists a retailer sells its product at or above a specific price. This practice is not legal in the state of New York and is pursued aggressively if discovered. Resale price maintenance, which is a form of price fixing, occurs when the retailer is informed that they may not sell at a price that is less or more than a competitor selling the same product.
Group boycotts – this practice involves refusing to provide a product or service to a specific group of patrons. For example, if a bakery in a city or municipality refuses to provide wedding cakes to gay couples, this would be considered a group boycott and a violation of anti-trust statutes.
Tying arrangements – this practice involves businesses that refuse to provide a product or service unless another product is purchased along with it. These types of arrangements are not legal under any circumstances.

Anti-trust laws are enforced on a state level through the office of the Attorney General and on a federal level through the Federal Trade Commission and the Department of Justice. Companies that are considering buying another company, merging with another company, or are under investigation for potential violations should seek the assistance of an attorney who understands New York and federal laws as they apply to anti-trust rules. Contact Solomon Richman, P.C. at (516) 437-6443 for answers to any questions or concerns you may have, or if you are under investigation for potential violations of anti-trust rules to ensure you have a strong advocate on your side.