Mary Harp

Narkon/Lancaster
BA235 Principles of Public Procurement
8 December, 2015
Antitrust Law and Procurement
What is antitrust? According to several different sources, antitrust law is defined as laws
that seek to promote fair competition on the merits and to protect consumers and wronged
competitor businesses from anti-competitive business practices practices undertaken in effort to
undermine competitive commercial behavior in a given market or line of commerce.
(Markham)
There are several laws that have been passed by congress and I will mention just a couple
of them in this paper. The Sherman Act is the original, principal, and foremost antitrust statue in
the United States, setting forth the broad statutory proscriptions that act as a charter of the
marketplace and constitution of competition law in American jurisprudence. The Clayton Act
is another federal statute that imposes restrictions on proposed mergers and acquisitions. It also
supplements the Sherman Act, prohibiting certain kinds of commercial practices that excessively
stifle competition on the merits. The Federal Trade Commission Act is also another federal
statue which has regulatory authority to enforce the Sherman Act and the Clayton Act amount
other federal statutes (Markham).
Why does antitrust matter? It matters to consumers and businesses that have been
harmed by anti-competitive abuses or have been accused of employing them. It is also to

promote competition in the markets and prohibit anti-competitive monopolists, cartels, and
conspiracies. (Markham).
Price fixing is an agreement among competitors to raise, lower, or otherwise stabilize the
price range, or any other competitive term that will be offered for their products or service. Bid
Rigging refers to coordinated conduct among bidders that undermines the bidding process. One
common form of bid rigging is an agreement among bidders as to who will win the bid. (Guide).
How does an antitrust complaint come about? A competitor may complain about the
business practices of a more successful rival. It then brings an antitrust suit, or complains about
the matter to the Department of Justice. A civil antitrust case is brought and then a criminal
proceeding is initiated. The court then decides whether there has been an antitrust violation and
inevitably followed by appeals made by the losing party and then by further appeal. The entire
process can last two years (Markham).
Violation of the Sherman Act is a felony punishable by up to 10 years imprisonment and
a $ 1 million fine for individuals and a fine of up to $ 100 million for corporations. In addition,
collusion among competitors may also involve violations of mail or wire fraud statute, or other
federal felony statutes, all of which the Antitrust Division prosecutes (Preventing).
The Oregon Attorney General enforces federal and state antitrust laws. Typical antitrust
complaints involve allegations of price fixing, unlawful group boycotts and bid rigging. The
victims in antitrust cases include consumers who are impacted by higher prices and limited
choices, and businesses that are deprived of fair competition in the marketplace. Much of
Oregons enforcement activity is conducted in cooperation with other states and the federal
government. (About).
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Now that I have explained what antitrust is, the laws that cover these issues, why it
matters, what constitutes antitrust and how the State or Oregon as well as the federal government
handle violations, we will now explore antitrust within several agencies of the State of Oregon.
I have had the opportunity to interview several procurement professionals within many
agencies for the State of Oregon and was very surprised by what I learned. In comparing
responses to several questions I found almost all the agencies have not dealt with antitrust issues
and did not feel they needed to worry as their reasoning was antitrust usually only happens when
dealing with corporations.
Brenda Brown with Department of Human Services stated that all of her employees are
required to take a certain amount of hours of training and that as a new employee; the first order
of business is to start scheduling for training classes. She did mention the Department of Justice
has a Public Law Conference every year and one of the topics covered is antitrust so her
employees are given the basic information but should a concern come up, then it is reported to
the DOJ for investigation (Brown).
Toni Payseno with the Department of Revenue said they currently are working on several
different procurement contracts involving the most recent bill that was passed for legalizing
marijuana. What was interesting was hearing the amount of work that is being required now that
this law has passed. They are writing contracts for a building much like a check cashing place
with bullet proof windows and a large safe for tax money received from the sale of marijuana.
Any bank that is FDIC insured will not and cannot accept any money obtained from the sale of
illegal drugs, etc.

Tim Nord with the Oregon Department of Justice provided information to me through
email sharing a few antitrust cases that Oregon has been involved with. He stated that should a
contractor or vendor be involved with an antitrust case they immediately become disbarred from
doing business in the State of Oregon. One case that he mentioned had to do with LCD
manufacturers and how they had colluded to work together to limit the amount of products
available as well as price fixing. One of the interesting things about this case had to do with
companies having private meetings to discuss holding back on production of Thin-Film
Transistor-Liquid Crystal Displays (TFT-LCD) so that they could sell at higher prices to
consumers. The Oregon State Department of Justice became involved with this as a federal case
and at this time, a settlement has been reached but is in the process of being resolved.
With many hours of internet searching I found several cases that involved some type of
antitrust law such as the sale of CDs (compact discs) of three large retailers. The case stated that
corporate misconduct caused consumers to pay higher prices at the check-out counters and
created an uneven playing field on which businesses have to compete. This lawsuit was filed in
August 2000 and settled in September 2002. Another lawsuit filed in 2001 alleged that retail
prices of disposable contact lenses were too high and that defendant manufacturers agreed with
the American Optometric Association (AOA), in violation of antitrust laws, that their lenses
would be available only from eye care professionals and this caused consumers difficulty in
buying replacement lenses through the mail and from pharmacies. This case was settled in May
of 2001.
Another federal case involved a former New York executive involved in receiving
approximately $ 439,000 in kickbacks from vendors in exchange for printing contracts. Michele
Komack of HBO received kickbacks from individuals in exchange for steering printing contracts
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to approximately four companies but did not report the kickbacks on her income taxes. She was
charged with conspiracy to rig bids and allocate contracts for the sale of commercial printing
from September 1997 through February 1999.
As you can see from above, these are just a few cases that I have cited for this paper.
These and other cases can be found by visiting the Oregon Department of Justice webpage.
There are many antitrust cases throughout the United States as well as internationally. What I
found surprising yet also encouraging is that within the state agencies that I had interviews, not
one of them reported any antitrust cases to the Department of Justice office nor were they
concerned that this was an issue. Most of the agencies do have some type of ongoing training for
antitrust available and all encourage new and old employees to pursue the matter and understand
all rules and regulations.
In conclusion it is encouraging to see that the State of Oregon does not have a lot of
antitrust cases and that can apparently be assumed because of the continued diligence of
procurement professionals making sure contracts are all on the up and up. I feel that what I
found shows that all departments have great mission statements and that each one also has
transparency which is what the public wants to see.

Works Cited
"About Us ." Oregon Department of Justice Consumer Protection. Oregon
Department of Justice, n.d. Web. 6 Nov. 2015.
<http://www.doj.state.or.us/consumer/Pages/about.aspx>.

Brenda Brown, Oregon Department of Human Services, Personal Interview, 1

Dec. 2015

"Guide To Antitrust Laws." Washington State Attorney General. N.p., n.d. Web.
14 Nov. 2015. <http://www.atg.wa.gov/guide-antitrust-laws>.

Markham, William. "An Overview of Antitrust Law." Law Offices of William

Markham. N.p., 2000. Web. 8 Nov. 2015. <http://www.markhamlawfirm.com/lawarticles/antitrust-law-san-diego/>.

Payseno, Toni. Oregon Department of Revenue, Personal interview. 2 Dec.

2015.

"Preventing And Detecting Bid Rigging, Price Fixing, And Market Allocation In
Post-Disaster Rebuilding Projects." The United States Department of Justice. N.p., 25
June 2015. Web. 14 Nov. 2015. <http://www.justice.gov/atr/preventing-anddetecting-bid-rigging-price-fixing-and-market-allocation-post-disaster-rebuilding>.

Tim Nord, Oregon Department of Justice, Email Questionnaire, 2 Dec. 2015