(as published in the Western Business Journal )
Many small business owners are unaware that they may be exposed to antitrust liability, especially since antitrust concerns of large corporations hardly seem to affect small businesses. However, even small business owners need to be conscious of their potential antitrust liability, since antitrust enforcement does not differentiate between large and small businesses.
The antitrust laws consist of complex federal and state statutes and regulations. The Montana statutes, coupled with the federal antitrust statutes, outline specific antitrust violations and penalties. Small business owners should take the time to evaluate several common business practices, which could give rise to antitrust liability.
"Tying" violations occur where a business refuses to sell to a buyer unless the buyer also agrees to purchase a separate product or service in which the seller has a financial interest. A tying violation can occur implicitly, which is generally the case with small businesses. For example, if a customer is seeking to buy a good from a local store, and the store owner offers a purchase discount if the purchaser also agrees to service the good at a repair shop in which the store owner has an interest in, a tying violation has likely occurred.
Small business owners should also be concerned about "price-fixing." Price-fixing occurs where two business owners in the same market agree to set prices. Since many small business owners in similar markets talk to each other on a regular basis, price-fixing may occur implicitly. Even if two business owners do not formally agree to set prices, but it can be proven that they discussed price arrangements, and the effect is that prices become fixed, antitrust liability could arise.
Trade restraints in similar markets also raise antitrust concerns. Trade restraints involve agreements between wholesalers and/or retailers to limit their service and sales areas, so that competition is unduly restricted. These agreements cause an illegal market allocation.
Small business owners should be aware of the antitrust implications of their decisions. At the Moulton Law Firm, we have several attorneys who can help small business owners find creative ways to maximize their efficiency and competitiveness, while avoiding antitrust liability.
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