Antitrust Laws

Antitrust laws protect competition so that prices, quality, and choice are set by a working market rather than by companies coordinating behind the scenes. In the United States the core federal laws are the Sherman Act of 1890, the Clayton Act, and the Federal Trade Commission Act. The FTC and the Department of Justice enforce them, and private parties can sue too.

Section 1 of the Sherman Act bans contracts, combinations, and conspiracies that restrain trade, which covers price fixing, bid rigging, and dividing up markets. Section 2 bans monopolization. Criminal Sherman Act violations can bring fines of up to $100 million for a corporation and up to 10 years in prison for individuals.

For consumers, the most important piece is the private right to sue. Section 4 of the Clayton Act lets anyone injured by an antitrust violation recover three times their actual damages, plus costs and reasonable attorney's fees. That treble damages rule is why antitrust class actions can produce large settlements even when each person's overcharge was small.

Consumers who bought directly from the conspirators are "direct purchasers." People who bought through a middleman, like a grocery store, are "indirect purchasers," and they usually sue under state antitrust laws. Recent examples on our site include the beef price-fixing settlement, the RealPage rent pricing lawsuit, and the Invisalign antitrust settlement.