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How can the U.S. government sue a business?

Antitrust Lawsuits

The Antitrust Division of the U.S. Department of Justice is charged with promoting free and fair competition among American businesses. The Antitrust Division sues companies that violate civil antitrust laws, including those that forbid the merger of two companies that would constitute an unfair monopoly [source: Department of Justice]. As with other prosecutions, the Antirust Division must decide whether to pursue criminal convictions against organizations, collect civil damages or both.

The Antitrust Division enforces three major U.S. antitrust laws. The Sherman Antitrust Act hails from the trust-busting heyday of the 1890s, but the law is enforced exclusively by criminal prosecution, usually for allegations of price-fixing and bid-rigging. In both cases, two or more companies conspire to cheat consumers or businesses out of money by falsely raising the price of their goods or services. Convictions are a felony offense.

For civil lawsuits, the Antitrust Division turns to the Clayton Act, a 1914 law that prohibits mergers and acquisitions that will unfairly lessen competition [source: DOJ]. In recent decades, the DOJ has sued to block the mergers of major corporations like United Airlines and US Airways in 2001, software makers Microsoft and Intuit in 1995, and cellular phone carriers AT&T and T-Mobile in 2011.

The DOJ doesn't always win its lawsuits to block proposed mergers. In 2004, the DOJ sued to block the $11 billion merger of business software-makers Oracle and PeopleSoft. The companies fought the suit and won [source: Catan]. In other cases, the very act of filing a lawsuit is enough to derail merger deals, as was the case with AT&T and T-Mobile, which backed out the deal rather than engage in a potentially expensive fight.

The third major antitrust law is the Federal Trade Commission Act, which created the Federal Trade Commission (FTC) to enforce laws protecting consumers against fraudulent and deceptive business practices. The FTC's Bureau of Consumer Protection sues companies that break truth-in-advertising laws, flood inboxes with deceptive spam, or ignore the National Do Not Call Registry [source: FTC]. In 2012, for example, the FTC sued the Wyndham hotel chain for failing to protect its guests' credit card information during three data breaches in less than two years that compromised more than 600,000 accounts [source: Mills].

Now let's look at another way that the U.S. government can sue companies -- to protect itself and average citizens against fraud.