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How Bay Area tech firms face federal antitrust scrutiny

On Behalf of | Oct 30, 2024 | Government Investigations

Big tech companies in Silicon Valley often face federal antitrust investigations. In recent years, regulators have looked closely at major tech firms, questioning whether they have grown too powerful and potentially harm competition and consumers.

Tech leaders in the Bay Area need to be aware of antitrust laws. Learning the basics helps them prepare for possible investigations to protect their company.

What are the antitrust laws?

The Sherman Act of 1890 was the first U.S. antitrust law. It stops businesses from hurting competition unfairly. Two other laws, the Federal Trade Commission Act and the Clayton Act, complement it.

When looking at tech companies, regulators often check how they:

  • Buy or join with other firms
  • Set prices
  • Block other companies from the market
  • Collect and use customer data

The Federal Trade Commission and the Department of Justice enforce these laws.

Managing an antitrust investigation

Antitrust investigations often span months or years. Federal agents may request interviews, documents or access to company data at that time. It’s good to cooperate with the government, but you also need to protect your rights.

If your company becomes the target of a federal antitrust investigation:

  • Remain calm. Not all investigations lead to charges.
  • Preserve all relevant documents and data.
  • Reassure your employees and educate them about their responsibilities and rights.
  • Consider working with a criminal defense attorney experienced in government investigation cases.

Proving compliance demands careful planning and documentation. Stay calm during the whole process.

Potential outcomes and defenses

Federal antitrust investigations can end in different ways. The government might drop the case, seek a settlement or file a lawsuit.

If the government sues your business, you can use common defenses such as:

  • Showing that your actions didn’t hurt other companies
  • Proving that you don’t control enough of the market to cause harm
  • Explaining how your practices help consumers

Penalties for violating antitrust laws can get severe. Individuals involved may face hefty fines, forced divestitures or criminal charges for serious violations.

Equipping yourself and the rest of your team with knowledge of antitrust law can allow your company to face federal investigations head-on. You might even find ways to make your business stronger because of it.