The Fundamentals of Antitrust Law

David A. Ettinger
Chair, Antitrust and Trade Regulation
Honigman Miller Schwartz and Cohn LLP

The Basics of Antitrust Laws

The antitrust laws are designed to protect the process of competition and to prohibit activities that interfere with that process. It is the process that is protected rather than any particular firm. In the competitive process, firms may be injured or destroyed . That does not raise antitrust issues unless the injury results from activities that harm the competitive process.

There are a number of antitrust statues at the federal level. Every state with the exception of Pennsylvania has its own antitrust law, and most foreign countries have antitrust or competition laws as well. In general, the antitrust laws prohibit conspiracies in restraint of trade “ that is, conspiracies that harm overall competition. They also prohibit mergers and acquisitions that have the potential to create that harm. They also prohibit some single firm conduct, though they are more limited in that regard. The federal antitrust laws prohibit single firm conduct that monopolizes a market or creates a dangerous probability of monopolizing a market. Leveraging a monopoly in one market to harm competition in another market may also be prohibited . Finally, some state laws also prohibit actions that may be in their incipiency but have a potential to cause the same kind of competitive harm.

One misconception concerning the antitrust laws is that many people feel that the antitrust laws protect them against hard competition. It is quite clear that hard competition is to be desired under the philosophy of antitrust laws, and therefore, for example, low pricing without more is not unlawful except in limited circumstances.

There are a number of different kinds of antitrust cases. One category, of course, is private litigation brought by private parties. The other kinds involve government regulators; at the federal level, the Department of Justice and the Federal Trade Commission both pursue antitrust matters. The Justice Department pursues criminal antitrust matters exclusively. The FTC today pursues certain kinds of industries more commonly than the Justice Department. For example, the FTC tends to look more at healthcare issues than does the Justice Department. The Justice Department tends to be more involved in computer software matters.

Increasingly, the states have become involved in antitrust issues, and many state attorneys general have people working on antitrust issues full time. An antitrust lawyer always has to be aware of the states in which his client s conduct is occurring. The involvement of state enforcement officials may vary depending on the kind of industry affected, and whether the behavior in question tends to be localized. State attorneys general have often gotten together and brought cases on a national basis. Sometimes the state attorneys general are more interventionist in their philosophies than the federal regulators.