The Importance of Understanding Antitrust Laws

Every company needs to establish policies around Antitrust and Fair Competition. It’s vital that all employees, especially those in senior management, understand the policies and their relationship to the applicable laws and standards of appropriate business discussions. This article is the third in RPY’s series about the importance of training that supports payment facilitators in managing operations in a compliant manner.

Major Federal Antitrust Laws

There are three major federal antitrust laws that “prohibit business practices that unreasonably deprive consumers of the benefits of competition,” according to the United States Department of Justice website. While the average consumer probably has no idea these laws exist, they’re in place to save the consumer money. Without them, prices for products and services could potentially skyrocket.

The Sherman Antitrust Act makes any conspiracy to fix prices, rig bids, or otherwise unreasonably restrain interstate and foreign trade illegal. This act also makes it a crime to eliminate competition with anti-competitive conduct. Under this Act, it is unlawful to monopolize interstate commerce in any form. The Clayton Act differs in that it is a civil statute–and therefore carries no criminal penalties–that bans mergers and acquisitions that may weaken competition. The Federal Trade Commission Act forbids unfair methods of competition in interstate commerce, but, like the Clayton Act, carries no criminal penalty.

Payment Facilitators and Antitrust Laws

It’s not just your executive management that needs to have a strong understanding of these laws and how they apply to your business. As payment facilitators, you are responsible for your employees and the merchants under you, even though you may see them as your customer first and part of your company second. This means everyone at your organization will benefit from full and proper training on the antitrust laws–an employee handbook or a dashed-off policy won’t be enough. This is because it is all too easy to accidentally violate one of the antitrust acts.

Red Flags

The right training will educate your team on what to be on the lookout for in terms of potential violations. There are many ways someone you’re doing business with might request payment that would violate an antitrust law: perhaps the request is prior to contract, in cash or another untraceable fund, or in a country lacking banking transparency. Requests for political or charitable contributions, especially if they’re in cash, are a red flag, too, as are requests for kickbacks in exchange for using your company’s products at the requestor’s facility.

If a party refuses to verify that they will comply with all applicable laws regarding anti-corruption and antitrust, this may be a problem. So may covering up or refusing to disclose shareholders, partners, or principles. Company wire transfers that obscure the sender or recipient’s identity are red flags, too.

Your C-suite may know these warning signs inside and out–though many do not–but the important thing is that your entire team is confident in rooting out potentially unethical behavior and antitrust violations. Employees need to understand not only the details as they are released by the government, but the updates as they roll out annually. RPY provides the trainings that can get you there and keep you away from concern.