Not every PARCEL Counsel column needs to include the most important advice any attorney can provide to a client: “AVOID GOING TO JAIL.” This column, an initial introduction to antitrust law, definitely includes that advice.
Businesses compete. They seek to innovate; obtain market share; increase profits; and obtain advantages over their competitors. Sometimes they seek to do so working with competitors or using questionable business practices. The antitrust laws establish the rules and guardrails for acceptable and unacceptable forms of competition.
The Sherman and Clayton Antitrust Acts, enforced by the United States Department of Justice and Federal Trade Commission, are the two main US antitrust laws. Section 1 of the Sherman Act prohibits agreements that restrain trade. Section 2 prohibits actions to monopolize a part of trade or commerce.
Section 7 of the Clayton Act requires an antitrust review of certain mergers and acquisitions where the effect “may be to substantially lessen competition or tend to create a monopoly.”
Other federal laws also govern competition. Section 5 of the Federal Trade Commission Act prohibits “unfair methods of competition” and “unfair or deceptive acts or practices.” The Robinson-Patman Act also prohibits sales that discriminate in price on the sale of goods in certain circumstances. Federal laws regulate competition by prohibiting trademark and copyright infringement or the misuse or theft of trade secrets.
Each of the 50 states has its own set of antitrust laws. Many have also enacted a version of the Uniform Trade Secrets Act or other types of prohibition on unfair competition.
Some entities in the transportation industry, such as ocean carriers, marine terminal operators, and international air carriers, enjoy limited regulatory exemptions from the antitrust laws. Most – carriers, intermediaries, and shippers - do not.
The purpose of the federal antitrust laws is to protect competition, not competitors. Courts have interpreted the Sherman Act as prohibiting agreements that unreasonably restrain trade. That a company has been placed at a disadvantage due to the competitive practices of one or more rivals does not mean that there has been a violation of the antitrust laws.
Indeed, many types of agreements between competing companies are allowed under the antitrust laws because they create efficiencies and actually promote competition. For example, properly structured, the pooling of resources by competitors to engage in joint buying; marketing; or utilization of resources can create economies of scale that enhance competition.
What activities violate the antitrust laws? Engaging in price fixing; market divisions or customer allocations; bid rigging; and types of group boycotts are examples of activities that so unreasonably restrict competition that they are considered to be per se, or automatic,violations of the antitrust laws.
If not a per se violation, the activity is analyzed under the “rule of reason” test, where a court examines the market power of industry competitors; the competitive effects of any challenged activity; and the rationale for the activity and whether it is procompetitive or reasonably necessary.
Antitrust claims can result in possible lawsuits from competitors. The federal government can also seek the imposition of substantial civil and criminal penalties, both for individuals and corporations. Federal monetary penalties range from $1 million per individual up to $100 million per corporation, with up to 10 years imprisonment for individuals found in criminal violations of the law.
Executives from many industries, including transportation and logistics, are currently serving prison terms for violations of the federal antitrust laws. All parcel shippers thus need to be aware of the basic antitrust laws, especially the per se rules. The advice of legal counsel should always be sought to learn if proposed business activities could violate the antitrust laws. All for now!
Andrew M. Danas is a Partner, Grove, Jaskiewicz and Cobert, LLP, Washington, D.C. Visit www.gjcobert.com or email adanas@danaslaw.com for more information. The information contained in this article is intended to be general background information. It does not constitute and should not be relied upon as legal advice. Readers should contact a qualified attorney should they have a specific legal question.
Previous Parcel Counsel columns, including those of regular Parcel Counsel Author, Brent Wm. Primus, JD, may be found in the “Content Library” on PARCELindustry.com. Your questions are also welcome at brent@primuslawoffice.com
This article originally appeared in the May/June, 2025 issue of PARCEL.
