LEGAL.Q: Some companies in my industry have suggested that we not compete on the basis of health or safety claims about our products because to do so would make the public question all products. What legal concerns need to be considered? A: Some companies may seek to avoid raising health, safety, or environmental issues concerning their products in an effort to avoid adverse public reaction or to preserve market share. For example, company X might believe it is a good idea to agree with company Y not to raise such concerns about company Y's products, if company Y doesn't raise any issues about company X's products. These agreements, and, in some cases, even preliminary discussions with the best of intentions, may subject the companies to civil and even criminal liability under antitrust laws antitrust laws n. acts adopted by Congress to outlaw or restrict business practices considered to be monopolistic or which restrain interstate commerce. The Sherman Antitrust Act of 1890 declared illegal "every contract, combination.... . Such agreements could have the effect of inhibiting in·hib·it tr.v. in·hib·it·ed, in·hib·it·ing, in·hib·its 1. To hold back; restrain. See Synonyms at restrain. 2. To prohibit; forbid. 3. competition or otherwise restraining RESTRAINING. Narrowing down, making less extensive; as, a restraining statute, by which the common law is narrowed down or made less extensive in its operation. trade; combinations or conspiracies in restraint of trade restraint of trade Preventing of free competition in business by some action or condition such as price-fixing or the creation of a monopoly. The U.S. has a long-standing policy of maintaining competition among business enterprises through antitrust laws, the best-known of are prohibited pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. . It's best to avoid any joint or collective agreements not to compete based on health, safety, or environmental issues. Submitted by ASAE's Ask the Legal Section Committee. The "Legal" item is not intended as legal advice but rather as an educational overview. |
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