Absence of Agreement

As mentioned, the federal antitrust statutes make a lot of anti competitive business conduct illegal, regardless of the reason for the activity. Activities such as price fixing, bid rigging, and market allocation schemes are completely outlawed by the Sherman Antitrust Act. This means that in a prosecution for a price fixing scheme, any justifications for the agreement between companies to set a uniform price are excluded. Since the justifications are excluded from evidence, the jury does not even get to hear the argument for the justification of the price fixing. So, no matter how compelling a reason you may think exists for an agreement between two companies to set a price, that reason cannot be argued as a defense to price fixing.

For most of the per se violations of the Sherman Act, the justification for the activity is irrelevant to the case. A charge of bid rigging is not defended against with good motives or the honest belief that one’s actions were legal. Similarly, group boycotts are not saved by allegations that they are reasonable under specific circumstances. In a refusal to deal prosecution, it is no defense that the general public had full opportunity to buy the boycotted vendor’s goods. Since per se violations are most commonly prosecuted, and since explanations for per se violations are not valid defenses to the crimes, the most common defense to an antitrust violation is that the violation never occurred at all.

Absence of agreement is by far the most frequently employed defense in antitrust prosecutions. The existence of an agreement is the very first element the prosecution must prove beyond a reasonable doubt in pursuing charges under section one of the Sherman Act. And since any scheme to fix prices or rig bids is likely to be committed by seasoned businessmen who well know the illegality of their actions, the existence of such an agreement is likely to be hard to detect. The Antitrust Division of the Department of Justice lists several common indicators of collusion that they use to detect and prosecute antitrust offenders.