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Sanctions Under Antitrust Law

18. What sanctions are available under the antitrust laws?

Together the Sherman Act, Clayton Act, and FTC Act allows for four legal sanctions:

•    Injunctions of Activity – Injunctions order a party not to violate or continue violating antitrust provisions. These can be administrative or judicial.

•    Treble (triple) Damages – Plaintiffs may recover civil damages suffered as a result of violation of the antitrust laws. Section 4 of the Clayton Act authorizes victims in a civil action (private parties or the US Government) to collect three times the damages they have suffered, plus court costs and reasonable attorneys’ fees.

•    Criminal Fines and Imprisonment (felonies) – Individuals fined up to $1 million and 10 years in prison. Corporations may be fined up to $100 million per offense.

•    Nolo Contendere – Defendant’s will often plead nolo contendere in a criminal action and focus on defending the civil action case. The reason is that a criminal conviction is largely conclusive in proving violation in the civil court. A nolo contendere plea avoids this scenario.

The FTC, DOJ, state governments, and private parties may bring actions to enforce antitrust laws and may seek any combination of the above sanctions.

•    Discussion: How do you feel about the sanctions associated with violations of the antitrust laws? Should there by criminal penalties attached to this conduct?

•    Practice Question: MicroData, Inc, produces software for use personal computers. MicroData has been pricing its product at below its cost of production in an effort to force its primary competitor, DataServe, out of the market. MicroData received a cease and desist order from the FTC, but it has continued the practice. What are the possible sanctions that MicroData could face in this situation?

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