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Antitrust law violations can result in business litigation

Business owners in California may think of competitors or employees when it comes to discussions of litigation, but in truth, the federal government may get involved if there are legal complaints. The Federal Trade Commission's mission is to protect consumers

How does the FTC carry out its aims? Primarily, the agency's goals are reached through identifying and stopping fraud, or deceptive or unfair business practices. The agency's authority includes working with local law enforcement, as well as filing lawsuits. 

The legislation that the agency enforces are known as antitrust laws. These laws focus on prohibiting activity that would create mergers allowing companies to monopolize an area of the market. Monopolization can destroy other companies so that, once the competition is eliminated, prices can be raised prohibitively. Consequently, mergers must be evaluated by the FTC before they can proceed.

Identifying unfair trade practices is not necessarily straightforward, though. The FTC points out that antitrust laws use general terms, which can be open to interpretation by the courts. For example, the Supreme Court ruled that every act that restrains trade is not necessarily harmful to competition, but an act that does so in an unreasonable way is illegal. Therefore, whether a business has violated an antitrust law may come down to the discretion of the Supreme Court regarding the unreasonableness of the activity.

Some activities are not open to discretionary rulings. These include price fixing, rigged bidding and market divisions. Penalties can be leveed against corporations that are found guilty, but individuals within the companies may also receive stiff penalties.

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