By Zarina Kizimov, Trade Compliance & Logistics Manager
Have you ever been asked about your company’s Antitrust Law Policy in your vendor’s or customer’s survey?
Was it terra incognita for you at that time? Is it still?
Whether you are new to this or have a strong compliance program that has you covered, here are some interesting facts that may help.
Antitrust Law is all laws that intend to promote and regulate competition and prevent monopolies.
By the end of the Industrial Revolution age, the new manufacturing processes and achievements had shaped the new economy and therefore the new ways of doing business.
Big corporations emerged and started dictating their own rules of trade. Countries’ economies were (and some of them still are) heavily dependent on those powerful businesses.
Governments saw the danger in the existence of such dominant influence and were called on to reform the state of things.
The U.S. Government’s first response, for instance, was the Sherman Act of 1890 which prohibited any contracts, combination, or conspiracy in restraint of trade and (prohibited) monopoly.
The Sherman Act was the first response to corporations’ attempts to monopolize internal or foreign commerce, it was also the tool used to achieve the enforcement of civil U.S. antitrust law and the promotion of consumer protection, as well as to break the existing monopolies.
However, as it happens with any new law, this one was not perfect either. There were ambiguities and grey areas. The Clayton Act of 1914 clarified certain provisions and defined illegal practices more accurately.
The Federal Trade Commission Act was also passed in 1914, and this is when the Federal Trade Commission (FTC) was created to enforce the Clayton Act. The FTC has become an independent agency whose mission is the enforcement of civil U.S. antitrust law and the promotion of consumer protection.
The FTC’s mission is to prevent illegal practices. The agency issues trade methods, rules, and guidelines that serve as informal legal opinions on certain industry-specific processes. These guidelines are then followed by businesses across an industry, which informally sets the expectation of adherence to the set of policies. The FTC shares jurisdiction over federal civil antitrust enforcement with the Department of Justice Antitrust Division. The latter also publishes guidelines, procedures, and updates that are easily accessible on their website:
Companies that are building and maintaining their Compliance Programs can always refer to the above-mentioned resources and structure a strong Compliance framework.