Violation Of Antitrust Laws

Around 1890, Congress started to create antitrust laws, and several cases involving antitrust laws as early as the past year, such as the Sherman Act which outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize.” The antitrust laws prohibit illegal mergers and commercial practices in general terms, thus leaving the courts to decide on which practices are unlawful based on the facts of each case.
In December 1971, the American Electric Power Co sued GE and Westinghouse for alleged conspiracy in violation of the Sherman Act, an antitrust law. Specifically, GE and Westinghouse was charged with upholding an agreement to eliminate price competition, establishing uniform prices and submitting non-competitive bids to purchasers. GE denied these charges and later filed a countersuit in March 1972. American Power’s CEO, Donald C Cook, labeled GE’s counterclaim as
“absurd” and stated that it was just to distract from the price fixing charges that GE faced.
Soon after, the Department of justice continued its investigation of the company, arguing that “This public exchange of assurances, with such intent, did constitute an agreement to stabilize prices which warranted the filing of a civil action ... alleging a violation of the Sherman Act”, (Cabral, 2). GE and
Westinghouse agreed to settle so long as the settlement was treated as an adaptation of the 1962 consent decree. “The new antitrust doctrine argues that an agreement between firms does not require a smoke-filled room: the agreement can also be established through a ‘public communication of pricing system.’ Publishing a price book and announcing price changes ahead of time may be construed as an invitation for the rival to do the same; and as a result may have the same effect as meeting the rival face to face,” (Cabral, 2).