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A Better Partnership

Ahead of the Curve Auto Supplier Blog

August 13, 2012

What is Antitrust? How to Avoid a Violation or Respond to a Search Warrant

Hefty fines and even prison sentences are stark realities for some violators of U.S.antitrust laws. In today’s regulatory environment, fines have risen from a total of $48 million in the 1970s to more than $4.2 billion after Y2K. Moreover, some unhappy corporate employees are serving up to 24 months in prison. So you may be wondering what antitrust laws actually mean. Better yet, how can your company avoid a violation? If regulators come knocking on your door, are you prepared to respond?

In general, U.S. antitrust laws prohibit agreement between competitors that adversely affect competition. This includes agreements on bids, prices, customers and credit terms, to name a few. You might think that an agreement means any written or oral contract between competitors; however, under the appropriate circumstances just a wink or a nod can be enough. For example, a discussion about a subject like pricing followed by similar conduct can be used by the government as proof of an agreement. Likewise, even the appearance of an agreement to fix prices, divide customers or markets, or “not to deal” with other competitors or customers can be used as evidence in a prosecution.

Yet, many common mistakes can be avoided by having a plan and proper procedures in place. Here are some things to consider to avoid running into an antitrust problem:

 Be Proactive: Consider developing antitrust policies and procedures and inform and train employees accordingly.

Be Prepared for the Unexpected: Discuss and develop a plan with your attorney on how to respond to a search warrant. In particular, important subjects that should be discussed include who should supervise the search, how to respond to media inquiries and what information, such as a copy of the warrant and affidavit, should be requested from investigators.

Learn What to Avoid: Understand that engaging in additional acts, such as destroying, hiding, misplacing or otherwise concealing documents or consenting to an officer’s search that is outside the parameters of the warrant, will likely cause more problems than benefits.

Dealing with a search warrant or investigation can be stressful and disruptive. Following these tips can help protect your company’s interests during an investigation. Still, avoidance of regulatory scrutiny is the best option.

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