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Understanding Competition & Antitrust: Key Take-homes for Those Considering Training Contracts
Competition and antitrust are the same area, under different names. Antitrust is the US term, whereas in the UK the term competition is normally used. An antitrust law is designed to protect consumers from predatory business practices, and to ensure that fair competition can take place. These laws shift and evolve in order to keep the marketplace fair and open. Antitrust laws can be applied to a range of different business activities, including market allocation, bid rigging, price fixing, and monopolies. Without antitrust laws, consumers would have less choice, would be likely to pay more, and would be at the whims of a small group or limited supply.
You should be aware that the US antitrust laws and the EU competition laws differ in that the EU enforces fines through an administrative system, whereas the US can deploy either fines or custodial sentences, through the criminal law system.
Areas of Antitrust
The following are some of the core concepts in antitrust that governments seek to legislate against and protect the public from:
Market Allocation: This is when two or more entities join together to direct their own business activities to a set geography or customer group, leaving the other areas free to the other party or parties. This is also known as a regional monopoly.
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Bid rigging: This is when two or more parties collude to decide who will win a contract. Here, the parties that ‘lose’ the bid will purposefully make lower bids, thus allowing the winner to secure the deal. In the US, this is a felony and can lead to jail time.
Price fixing: This is when the price of a particular product or a service is determined by a business, rather than through the fair impact of market forces. In order for a price to be fixed, you would expect to see either one very powerful company which dominates the market, or smaller companies coming together to fix the price.
Monopolies: A monopoly is when a particular area of commerce is dominated by one firm, allowing them to exert such influence and power within that area that the consumer suffers.
A recent case that is often referenced in Antitrust is Microsoft, who were found guilty of being anti-competitive through forcing the use of its proprietary web browser on the computers that used Microsoft Windows.
What do antitrust lawyers do?
An antitrust lawyer will perform a variety of roles and tasks. Examples include:
– Negotiating clearance for M&A
– Advise on agreements made to ensure that competition challenges will not yield results
– Defend, or levy, claims in the Competition Appeal Tribunal
– Advise on cross-border trade: this is relevant if you have great commercial awareness and a desire to push your career in both the commercial and antitrust spaces
– Deal with investigations into your clients
– Advise on anti-dumping measures (which prevent a company from exporting products for less than they would sell in the home market)
– Take a regulatory role, where you investigate companies and advise on new laws and regulations
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What it’s like working as a antitrust lawyer, and what to expect during a Law Training Contract
Antitrust lawyers are generally closely supervised by more senior lawyers. You should therefore expect your work, especially as a trainee, to involve a lot of research into markets and previous cases. You will need to be able to deploy great commercial awareness in order to succeed, and ally this to being highly meticulous. It is a popular area of practice. Don’t expect to be appearing in the High Court or the Competition Appeal Tribunal regularly, although as you progress you might have the opportunity to take on some advocacy roles. Expect travelling abroad to be a welcome feature of your work if you are at a large international firm, especially if you are fluent in another language.
Understanding the CMA
The CMA, the Competition and Markets Authority, was established on the 1st April 2014. It is the Uk government’s primary regulatory body, and takes on many of the functions of the Office of Fair Trading and the Competition Commision. It works with other bodies like Ofcom, which covers media and telecoms. The CMA was developed to strengthen the UK economy through eradicating anti-competitive business activities, and has a higher budget than any anti-competition body in the UK before it.
