What are the anti-trust laws that govern e-commerce businesses?
In California, e-commerce businesses must abide by anti-trust laws, which are designed to protect competition in the marketplace and keep businesses from gaining a monopoly that would allow them to unfairly increase prices or reduce quality of products. California’s Cartwright Act is the state’s main anti-trust law and prohibits businesses from forming any combination or conspiracy that unreasonably restrains trade. This law applies to all e-commerce businesses, no matter their size or location. The Cartwright Act also prohibits businesses from using unfair or predatory tactics that could strengthen their position in the market or drive competitors out of business. This could include activities such as setting prices that are lower than the cost of production in order to drive out competitors or tying a service or product with another product that customers must buy together. E-commerce businesses must also be aware of the Sherman Act, a federal anti-trust law that prohibits businesses from forming cartels or trusts that interfere with free trade. The Federal Trade Commission enforces the Sherman Act and has broad authority to investigate violations. Businesses found to have violated the Sherman Act could be subject to fines or even criminal charges. It is important for e-commerce businesses to familiarize themselves with all anti-trust laws in order to remain compliant and avoid potential penalties. Staying up to date on changes in anti-trust laws is also important, as these laws can change frequently and unexpectedly.
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