Department of Justice Continues Antitrust Crackdown
In recent months, we’ve seen multiple major announcements from the Department of Justice (DOJ) on antitrust matters. We’ve seen them file litigation to break up Ticketmaster and pursue Apple for “monopolizing” the smartphone market, among others. This persistent effort under the current administration highlights critical compliance matters for major tech companies, but it should also raise the red flag for small and midsize companies.
At Ivory Law Group, we regularly work with companies with anywhere from 50 to 400 employees, largely in the tech space. While we aren’t working with the Ticketmasters or Apples of the world, antitrust laws aren’t only about negatively affecting a larger market. Antitrust laws apply to the market you operate in, meaning even smaller companies face antitrust litigation on occasion. Additionally, when these companies merge with larger companies the new entity may face expanded attention from the DOJ or other government or regulatory agencies.
Why Small Businesses Still Need to be Aware of Antitrust Laws
As noted above, antitrust law applies to the market you’re operating in, how your actions impact the ability of competitors to operate in that market, and how it impacts consumers. Your market doesn’t have to be national or international for antitrust enforcement.
For example, the Sherman Act targets and penalizes companies that collude to fix prices or rig bids for work. This could mean one individual business or multiple businesses working together to put consumers and other companies at a disadvantage in a non-competitive manner. Companies have a right to compete and attempt to garner a profit, but noncompetitive tactics will raise regulatory red flags.
How Mergers Can Violate Antitrust Laws
You might be small today, but one phone call from a bigger company looking to merge with or acquire your business could change that. However, the DOJ and FTC have halted mergers and acquisitions in the past which would have resulted in an unfair share of a given market.
If a major business attempts to collect a number of smaller businesses in order to fully corner a market then it’s likely to be met with resistance from the government. Even in a country that strongly supports businesses, there are limits that must be understood and observed for any savvy business owner. This is especially true in tech where the government has been litigating antitrust cases at an increased rate.
How Antitrust Laws Help Small and Midsize Businesses
In the long run, antitrust laws help not just consumers but also small and midsize businesses. Market concentration is a dangerous tool that bigger companies use to leave no space for smaller companies to thrive. When the DOJ targets companies like Ticketmaster and Apple, they seek to end anti-competitive practices that put “the little guy” in an impossible position.
When these laws are enforced, it allows more companies to enter a market and compete for the money consumers have allotted to the goods or services offered. For example, breaking up Ticketmaster would allow more local venues and ticketing agencies to host acts and generate a profit from the growing experience economy.
Don’t Ignore Antitrust Laws Regardless of the Size of Your Company
We want to help small and midsized businesses in the United States thrive in their market through effective legal representation. Being a legal partner means providing more than just on-the-spot legal services. At Ivory Law Group, we want to serve as your in-house legal partner to provide consistent services through the use of data and modern technology. Contact our firm today to ensure you’re getting the best legal services for your business and get help avoiding complex and expensive antitrust litigation.