Antitrust Law
Perhaps the most important premise of the American marketplace is that businesses may vigorously compete for customers and profits. In a functioning market, businesses must attract customers in order to stay profitable. This free and vigorous competition that creates a “fair price” for services and goods and offers customers important choices and fair prices.
Sometimes, one or two large businesses may have control of much of the market for a specific product or service. A large company in this position is often said to have a monopoly. Not all monopolies are illegal. Sometimes, a company becomes very powerful, by gaining its market share fairly. Other times, though, monopolies are created or maintained by unfair methods of competition. In 1890, Congress passed the Sherman Antitrust Act in order to discourage unfair monopolies and punish those companies that illegally seek to produce or maintain a monopoly. Congress recognized that monopolies destroy normal marketplace competition, create unfair pricing and often cause markets to stagnate.
Despite Congress’ efforts, anti-competitive activities continue today. Large companies sometimes act illegally to force smaller companies out of business. If they are successful, many people can be hurt. The owners of the victimized business lose their hard-earned business, employees lose their jobs and customers lose an important option in the marketplace.
An Overview of the Sherman Act
The Federal Sherman Act is limited by Constitutional constraints on the Federal government. The commerce clause, however, allows for a wide interpretation and application of this Act. As a result, the Sherman Act applies to all transactions and business involved in interstate commerce. This has been interpreted broadly to include most local activities and local businesses.
Most, if not all, states have comparable statutes prohibiting monopolistic conduct, price fixing agreements, and other acts in restraint of trade having strictly local impact.
Simon Passanante’s Unique Approach to Antitrust Law
Antitrust litigation is expensive. Experts can be costly and legal work can stretch on for four years or more. Many small and medium-sized businesses simply cannot afford to pay hourly legal bills up front.
At Simon Passanante, we evaluate antitrust cases at no obligation to the business. If the case is strong, we can handle it on a contingency fee basis. A contingency fee reduces a client’s risk while allowing it to pursue a claim no matter how large the defendant or protracted the litigation. (Clients may be responsible for costs or expenses.)
To hear more from one of our antitrust attorneys, listen to the videos on this page. To find out if Simon Passanante can assist your business, contact Anthony G. Simon, 314-241-2929 or e-mail ASimon@spstl-law.com.
A Simon Passanante Success Story
In November 2006, Simon Passanante successfully represented Custom Hardware Engineering and Consulting Inc. (CHE) in a complex commercial, intellectual property and antitrust case.
CHE is an independent business that repairs large data storage systems manufactured by Storage Technology Corporation (“STK”). STK and CHE were the only companies in the market that serviced STK storage systems. Although CHE was a smaller business, it offered excellent service at a cost far below that of STK. As a result, a big demand developed for its services.
On Oct. 29, 2002, CHE was sued by STK (now a subsidiary of Sun Microsystems) for patent infringement. Simon Passanante reviewed the evidence and concluding that CHE and its owner, David York, had an antitrust case against STK. The law firm filed a counterclaim for CHE against STK alleging that STK tried to force CHE out of the market. STK’s alleged activities included:
Disparaging CHE in letters and other communications;
Placing code in STK customers’ machines which would not allow anyone other than STK to service the customers’ machines unless the customers paid large sums of money to STK;
Replacing customers’ existing machines with new machines for the purpose of making it more difficult for CHE to service the machines;
Ending the sale of information necessary for the service of data storage systems despite the fact that the information had regularly been sold prior to CHE’s arrival on the market.
The complex litigation culminated in a five-week trial in Boston. CHE sought more than $140 million in damages. Just before the jury was to begin deliberations, STK settled with York and CHE. STK agreed to pay CHE a confidential amount, agreed CHE and York had the right to work on STK storage systems, allowed CHE and York to use the tools and information needed to work effectively, and promised to never again sue CHE for its work on STK storage machines.
For more about the case of STK v. CHE, click here. See, also, this IPLaw360 article.
