Arthur R. Lehman, L.L.C.

Examples of restraint of trade in New York

Doing business in New York can be complicated, with the risks, competition and other factors that arise in the marketplace. In some instances, there are also competitors who use nefarious tactics to overcome their competition in an unethical and illegal way. One strategy that is often attempted is restraint of trade. This is illegal and there are laws in place that the state attorney general enforces to prevent it and protect those who are being affected by it.

The federal law against restraint of trade and commerce is known as the Sherman Act. Passed in 1890, it makes such acts as fixing of prices, boycotting, rigging bids, tying arrangements and market allocations illegal. In addition, it stops the monopolies that can happen with interstate commerce. Those who are found to have taken part in these acts can face fines of as much as $100 million if it is a corporation or a $1 million fine and being incarcerated for up to 10 years if it is an individual. New York has a somewhat different interpretation of the antitrust law known as the Donnelly Act from 1899, but it is similar to the Sherman Act. In addition, the Attorney General of the state can fine corporations $1 million and individuals $100,000, with as many as four years in jail.

Price fixing is when a manufacturer or distributor inflates prices as a group for the services or goods they're offering. It can be wholesale or retail. Bid rigging is an agreement among bidders as to which company will be able to put forth a bid for various contracts or what will be offered in the bid. Market allocation is an agreement among competing companies that they won't try to poach one another's customers or work in certain areas. A trying arrangement is when sellers who have a certain amount of power over an individual product will agree to only sell it to buyers who agree to purchase another product they're selling - the product that is "tied."

The state and federal laws have been implemented to protect the consumer, as well as other businesses, from these types of behaviors. That, however, doesn't stop a large number of companies and individuals from pushing the envelope to benefit themselves. When there is a concern about unfair competition, a business tort might be applicable. For help, legal assistance is imperative.

Source: ag.ny.gov, "Antitrust Enforcement," accessed on Feb. 8, 2015

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