is Antitrust and Why Should You Care?
Antitrust may seem like
one of those academic business ethics topics that should be left to the lawyers.
You may have heard about Microsoft or AT&T antirust
lawsuits in the news, but you dont know if there is any kind of real-life
connection to your work. Why should a sales rep, middle manager, engineer care?
The reason is simple; antitrust laws not only regulate the grand policies of
large corporations but they also govern some of the day-to-day behaviors and
conversations you have in the course of your job. In fact, it only takes a
few wayward employees to bring a large corporation to its knees. Even a seemingly insignificant employee
can get his or her company into serious antitrust trouble if the wrong things
are said to the wrong people.
So, what are antitrust laws? First, understand that in a freely competitive
market, each business attracts customers by providing the best product at
the best price. This is how things should work. When companies engage in
business practices or monopolize a market, they throw this system out of
balance. Antitrust laws are designed to protect competition and protect
Imagine what would happen if you had to buy your computer from only one company
or your groceries from only one store? Without competition, that business
could charge whatever it wanted and you would have little power to change
This is what happened in the United States in the 1800s. A few companies
and individuals monopolized much of the tobacco, railroad, and steel industries.
These monopolies were called trusts (or now commonly known as cartels). As
a result, antitrust laws such as the Sherman Antitrust Act were passed along
with later laws such as the Clayton Act and the creation of the Federal Trade
Commission. These antitrust laws allowed for both civil and criminal penalties
to be brought against abusers. Today, most western countries have antitrust
laws of some form, including the European Union.
Basically, antitrust laws prohibit price-fixing, allocating territories,
boycotts, or any other kind of conspiratorial or monopolistic behavior
that unfairly restrain free trade. These violations dont have to be
formal agreements between high-level executives, but can include the behavior
One of the most important areas of antitrust laws involves price-fixing.
This is any kind of agreement between competitors about the price of a
referred to as bid-rigging). Any such agreement is a serious
antitrust violation. As a rule of thumb you should never discuss prices,
even in general
ball-park terms, with competitors. This is especially important at trade
association events or conferences where a lot of individuals from the same
present in the same location.
Other antitrust areas include allocating territories or customers and boycotts.
You cant divide up territories with a competitor or agree to sell only
to certain individuals. This is fundamentally unfair and illegal. You should
never hear someone say, According to our agreement with so-and-so (the
sellers competitor), we cant sell to you. Likewise, you
cannot agree with a competitor or other company to boycott a third party
how justified you feel the boycott is. It is one thing to personally boycott
something based on your own moral disagreement, but it an entirely different
thing when businesses agree to shut out another company with any kind of
As an employee, there are some important things that you can do to protect
your company. First, watch what you say and to whom you say it. Do not communicate
with competitors on sensitive competitive topics. Any kind of discussion
about money, customers, or plans could get you into serious trouble. Second,
how you speak and write in memos, studies, reports, email, and voice mail.
These communications can be saved indefinitely and a poorly worded message
may come back to haunt you. Third, antitrust is a complicated legal area
and you shouldnt be shy about asking for professional help from your companys
Unfortunately, antitrust is one of those areas that you may not think too
much about until you find yourself a stranded consumer with no choices
left on the
shelf. Fair competition is vital to a free, functioning society. As an employee,
you have a responsibility to keep our economic system fair by understanding
and obeying the laws and to report wrongdoing when you see it. Its not
only up to the lawyers and big shots, its up to you.
©2006 CTI/GEU All Rights Reserved