Antitrust & Unfair Competition Law Section: An Introduction
The Antitrust & Unfair Competition Law Section of the Utah State Bar was established in January 2005. Our membership currently includes lawyers on both the plaintiff and defense sides of the Bar, academics, government prosecutors and economists. In that regard, we would like to invite all Utah lawyers whose practices involve antitrust and unfair competition matters to join our Section and add their expertise to our group. We believe we will form an effective network of lawyers in Utah whose knowledge and expertise allow us to support each others' practices.
Why 'Antitrust & Unfair Competition Law'?
Twenty years ago, lawyers were frequently heard commenting that 'antitrust law' was dead (or, at least, dying) and that antitrust practitioners were searching to re-establish themselves in new, 'growing' areas of the law. In reality, antitrust law, like many things, is somewhat cyclical. While federal antitrust enforcement activities often vary based on the current administration's economic policies, antitrust law itself has remained quite vibrant and continues to evolve. This should come as little surprise. As the U.S. and global markets change and grow with the 'new economy,' the market participants' power and influence in those markets can wax and wane at an astounding rate. These dynamic markets often require new understandings of the exercise of market power, the relationships between the participants, and other competition-related matters. In addition, following the collapse of Enron (and others) and the rise of Sarbanes-Oxley, corporate legal compliance, including antitrust compliance, has also taken on a new importance.
In short, times have changed. Both national and state antitrust practice has taken on a new importance and, correspondingly, the national and state bar associations reflect that change. The Antitrust Section of the American Bar Association is one of the best organized and most respected sections of the ABA. Likewise, many state bar organizations (particularly those in states with significant economies) have antitrust sections for their practitioners. We believe the time has come for the Utah State Bar to join the ranks of those states. The development of Utah's economy and increasing sophistication of Utah business will bring greater scrutiny to commercial activity in Utah and a corresponding demand for sound legal advice from Utah lawyers.
We have also sought to broaden the scope of the Section beyond 'antitrust' issues by including 'unfair competition.' More and more frequently, persons and businesses seeking to improperly consolidate market power will engage in a variety of conduct that runs afoul of much more than traditional antitrust laws like the Sherman Act and Clayton Act. Thus, by 'unfair competition,' we intend to include related areas of the law, such as false or deceptive advertising, employee raiding, unfair import competition, RICO, commercial bribery, economic espionage, and various common law torts. To some degree, we believe we will have some interesting opportunities to involve other sections of the Bar, including the Intellectual Property Section and Cyberlaw Section where unfair competition law crosses paths with these areas.
Antitrust? What is that about?
Unfortunately, antitrust law has the tendency to frighten away many lawyers simply by its complex legal and economic framework. However, given the fact that virtually every business faces antitrust issues, it is an area of law with which all lawyers should have at least basic familiarity. Federal and state antitrust laws involve a variety of aspects of your clients' businesses. By way of background, antitrust law (hopefully) protects competition in the marketplace and prevents the improper consolidation of market power. Antitrust law, therefore, is concerned with conduct among competitors and, to a lesser degree, among suppliers, distributors and customers. It also regulates the competitive behavior of companies who hold dominant positions in their respective markets. Antitrust law even addresses pricing and marketing programs, generally requiring that customers be treated equally and that companies engage in accurate advertising campaigns.
Most lawyers know that it is illegal for competitors to agree to fix prices, allocate markets and customers, boycott other businesses, or collude during bidding. However, federal and state antitrust laws impact a variety of other commercial behavior. For example, when are exclusive territories and distributorships illegal? When is it appropriate to talk to your competitors and what subjects are off-limits? What are the guidelines for participating in an industry 'benchmarking' program? Can a company offer its competing customers different pricing and marketing support? What types of comparisons can a company make with its competitor's products? Helping clients navigate these frequently subtle and difficult issues can be critical to avoid criminal penalties and potentially massive civil liability.
With the passage of Sarbanes-Oxley, officers and directors of publicly-traded corporation have found themselves facing new requirements in overseeing the ethical and legal operations of their businesses. Indeed, even many non-profit and privately-held businesses have adopted 'quasi-Sarbanes' compliance programs as part of a 'best practices' program. Recent amendments to the Federal Sentencing Guidelines, though now merely 'advisory,' imposed specific requirements for businesses to create 'effective' corporate compliance programs. Most scholars and commentators believe that an antitrust compliance program, while not yet a 'certifiable' requirement under Sarbanes, is essential for any business. Many antitrust practitioners have found themselves frequently facing questions from clients interested in the creation, adoption and maintenance of an effective antitrust compliance program. Once again, the shifting economic and business landscape has imposed new demands on antitrust lawyers.
Antitrust Enforcement
Both federal and state enforcement authorities closely scrutinize the behavior on market participants for competition-related misconduct. On the federal level, the U.S. Department of Justice (DOJ) and the Federal Trade Commission enforce federal antitrust laws. The DOJ has also obtained the involvement of market participants in its surveillance by creating an 'amnesty' program that encourages corporations to come forward with evidence of anticompetitive activity (even when the corporation itself is involved) for greatly reduced fines and avoidance of jail time. According to the DOJ, a majority of its current investigations originate from the 'amnesty' program. By way of example, the DOJ is currently prosecuting a number of multi-national corporations and executives for price-fixing in synthetic rubber chemical markets. To date, the DOJ has netted over $200,000,000 in fines and key executives from several defendants have pled guilty and are awaiting sentencing.
On the state level, the Utah Attorney General's office has enforcement authority over Utah's antitrust laws. We have seen, over the past ten years, increasing enforcement activity by state regulators. A quick survey of Utah consent decrees and prosecutions reveals that the Utah Attorney General's Office actively enforces and oversees the conduct of business in Utah from an antitrust perspective.
Of course, the antitrust laws are also enforced by civil litigants as well. The federal Clayton Act (and Utah state law) allows private parties to sue each other for violations of the antitrust laws. These cases usually originate with frustrated competitors, terminated distributors, or customers who have not received the 'best price' for their purchases. While these cases lack the criminal aspects of a government prosecution, they are notoriously time-consuming, expensive and unpredictable in their outcomes.
Agenda for 2005-2006
We have some fairly modest, but important, goals for our first year. We have established a web page through the Utah State Bar at http://www.utahbar.org/sections/antitrustlaw/Welcome.html. We hope to make this a helpful clearinghouse of information and resources for antitrust lawyers in Utah. In addition, we intend to hold regular seminars and continuing legal education programs to build our network of lawyers and economists to share ideas on antitrust issues in Utah. We will also prepare a primer on Utah antitrust and unfair competition statutes and case law to be made available on our website. We will embark on creating a network of state bar antitrust sections from surrounding states to provide additional referrals and resources.
For the 2005-2006 year, the Section's officers are as follows:
Justin Toth, Ray Quinney & Nebeker ' Chair
Ronald Ockey, Utah Attorney General's Office ' Vice Chair
Peggy Tomsic, Tomsic Law Firm ' Treasurer
John Mackay, Ray Quinney & Nebeker ' Secretary
John Bogart, Bendinger, Crockett, Peterson, Greenwood & Casey ' Legislative Committee Liaison
Please feel free to contact any of the officers, or the Bar, if you would like to join, or become actively involved, in the Section. We welcome your participation.