Legal Definitions - antitrust

Antitrust refers to laws and regulations that aim to prevent companies from having too much power and limiting competition. This includes preventing monopolies and other practices that are harmful to competition.

There are federal and state antitrust laws in the United States. The three main federal antitrust laws are:

• Sherman Act Section 1: This law prohibits specific conduct that is deemed anticompetitive.
• Sherman Act Section 2: This law provides a way to stop anticompetitive practices that are already happening.
• Clayton Act: This law regulates mergers and acquisitions to prevent them from harming competition.

Many states have their own antitrust laws that are similar to the federal laws. For example, California has the Cartwright Act.

Violating antitrust laws can result in both criminal and civil penalties. Criminal penalties are rare and are usually reserved for intentional and clear violations. Civil penalties are more common and can result in fines that are sometimes in the billions of dollars.

For example, in 2020, the European Union fined Google $2.7 billion for violating antitrust laws by favoring its own shopping service over competitors in search results. This is an example of a company using its power to limit competition.

Another example is the breakup of the Bell System in the 1980s. The Bell System was a monopoly that controlled the telephone industry in the United States. The government broke it up into smaller companies to increase competition and lower prices for consumers.