New York City Antitrust Violations
Antitrust laws at the state and federal levels are designed to prevent franchisors, suppliers and other companies with significant “market power” from engaging in anti-competitive conduct that is harmful to consumers. However, in many cases, franchisors’ and suppliers’ anti-competitive practices are also harmful to franchisees, and these laws frequently give franchisees a private right of action to pursue legal remedies for antitrust violations.
Antitrust matters tend to involve intricate, high-complex legal issues with substantial financial implications. As a result, if you believe that your New York City franchise is being harmed by anti-competitive conduct, you need a lawyer who has significant experience dealing with these types of issues specifically within the context of the franchise relationship. Having spent the past three decades exclusively representing franchisees and dealers, attorney Jeffrey M. Goldstein offers a wealth of experience and insights for franchise-related antitrust disputes, and he is a proven litigator with a long track record of obtaining successful results for his clients.
Examples of Antitrust Violations in Franchising
Not all franchisor pricing guidelines are illegal. Franchisors have legally-recognized legitimate interests in controlling their franchisees’ practices in various respects, and many practices that are harmful to franchisees are permissible (even if not economically advisable) under the law.
That said, antitrust violations can take several different forms. We have represented New York City franchisees and dealers in cases involving issues such as:
- Unilateral Refusals to Deal – Franchisors’ refusals to deal with individual franchisees can give rise to claims under the federal Sherman Act. Examples include refusing to supply products to a franchisee who will not agree to minimum retail pricing and using franchise territories as a means to unlawfully limit franchisees’ market opportunities.
- Tying Arrangements – A classic tying arrangement involves a franchisor requiring its franchisees to purchase one product or service in order to also purchase another. However, some tying arrangements are not so clearly defined, and yet they still have substantial anti-competitive effects for franchisees.
- Minimum Price Fixing – New York is among the limited number of states that enforces a prohibition on minimum price fixing (or “minimum resale price maintenance”). This means, broadly speaking, that franchisors are prohibited from requiring franchisees to sell at or above a certain price.
- Profit Passovers – If you are required to pay an additional royalty or direct compensation to another franchisee when you sell outside of your franchise territory, your franchisor may be enforcing a profit passover that violates state and federal antitrust laws.
- Customer Restrictions – While using franchise territories to divide the market is a well-established practice, there are numerous instances in which franchisors’ customer restrictions for franchisees can go too far.
Other franchisor policies and practices that can give rise to private causes of action for state and federal antitrust violations include:
- Exclusive Territories and Exclusive Distributorships
- Exclusive Dealerships
- Agreements on Terms of Trade
- Full Line Pricing
- Discriminatory Prices or Terms of Sale
- Franchisee and Dealer Terminations
- Predatory Advertising
Speak with New York City Antitrust Lawyer Jeffrey M. Goldstein
If you believe that your franchisor may be engaging in anti-competitive conduct that is harming your franchise, we encourage you to contact us for a free, no-obligation. To speak with attorney Jeffrey M. Goldstein in confidence, please call (202) 293-3947 or tell us about your situation online today.