Other LanguagesAlthough you may not realize it, as a consumer, worker, or innovator, antitrust laws affect your daily life in a variety of ways. Whether you are shopping for food at the grocery store, searching for an apartment, trying a new prescription drug for a health condition, changing jobs, or have created a new, more efficient, or more cost-effective way of doing something that law abiding society wants, antitrust laws play an important role in ensuring that you have the benefit of competition to provide choices for such goods and services at competitive prices and to also ensure continued innovations in them. The antitrust laws accomplish these goals by promoting and fostering competition in the marketplace and preventing anticompetitive mergers.
In many respects, antitrust is a complex and intricate area of law that most consumers, workers, and innovators may only know about through what they have read in the newspapers or seen on the news. Even then, antitrust laws can appear somewhat distant and esoteric. This short guide discusses antitrust laws and provides answers to some of the basic questions consumers, workers and innovators often send to us. While this summary is not meant to be a comprehensive statement of the law, we hope that it will assist you in learning more about antitrust laws to better understand how both federal and state antitrust enforcers work to ensure a free and competitive marketplace.
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I. Background and History of the Antitrust Laws
A. Washington Constitution
Article XII, section 22 of Washington 's Constitution prohibits monopolies and combinations in restraint of trade since 1889. It also requires Washington's Legislature to "pass laws for the enforcement" of this section of Washington's constitution with "adequate penalties, and in case of incorporated companies, if necessary for that purpose, may declare a forfeiture of their franchises."
B. Washington State Antitrust Laws
In 1961, Washington's Legislature enacted the Unfair Business Practices-Consumer Protection statute, commonly referred to as the Consumer Protection Act, RCW Chapter 19.86 "to complement the body of federal law governing restraints of trade, unfair competition, and unfair, deceptive, and fraudulent ats or practices in order to protect the public and foster fair and honest competition." Portions of this statute have been amended over the years.
In 2019, Washington's Legislature expanded Washington State antitrust laws by enacting two additional antitrust statutes. First, it acted to protect workers by banning certain noncompetition covenants between Washington workers and businesses in RCW Chapter 49.62. Second, it acted to require pre-closing notification to our office for certain health care transactions in RCW Chapter 19.390.
In 2025, Washington's Legislature further expanded Washington State antitrust laws by serving as the first state to enact the Uniform Antitrust Premerger Notification Act, RCW Chapter 19.420. The Premerger Notification Act requires certain entities that file a Hart-Scott-Rodino (HSR) premerger notification with the federal government to contemporaneously file an HSR premerger notification with the AGO.
In 2026, Washington's Legislature bolstered its health care notification and noncompetition covenant statutes. First, it added a filing fee for health care transaction notifications provided under RCW Chapter 19.390 to provide a funding mechanism for our office's review of these notifications for potential anticompetitive concerns, effective starting on June 11, 2026. Second, it broadened the noncompetition covenant statute, RCW Chapter 49.62 by banning all noncompetition covenants between Washington workers and businesses. This broad noncompetition covenant ban will become effective starting June 30, 2027, and make all existing and future noncompetition covenants unenforceable.
C. Federal Antitrust Laws
The protection of competition by states like Washington inspired supplemental federal antitrust law. Twenty-one states had antitrust laws before Congress enacted the first federal antitrust law, the Sherman Antitrust Act, in 1890. See California v. ARC Am. Corp., 490 U.S. 93, 101, 109 S. Ct. 1661, 1665, 104 L. Ed. 2d 86 (1989) (citing Mosk, State Antitrust Enforcement and Coordination with Federal Enforcement, 21 A.B.A. Antitrust Section 358, 363 (1962)).
Perhaps the most significant of the federal antitrust laws, the Sherman Act was intended to combat the “business trusts” of the American economy during the late nineteenth century, and to this day it remains the bedrock of antitrust enforcement in the U.S. The Sherman Act prohibits two broad categories of conduct. First, it declares to be illegal “[e]very contract, combination, in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” Second, it prohibits efforts to “monopolize, . . . attempt[s] to monopolize, or . . . conspir[acies] … to monopolize any part of the trade or commerce among the several States, or with foreign nations.” While the Sherman Act is broadly worded to apply to all restraints of trade, the United States Supreme Court has interpreted the Sherman Act as applying only to unreasonable restraints of trade. Penalties for violating the Sherman Act can be either civil or criminal in nature. Only the United States Department of Justice has the authority to criminally prosecute individuals for violating the Sherman Act. Additionally, some states have criminal authority under their own state antitrust laws.
In 1914, Congress enacted two new antitrust laws. First, Congress enacted the Federal Trade Commission Act, which created the Federal Trade Commission and gave it the authority to enforce U.S. antitrust laws. Second, Congress enacted the Clayton Antitrust Act, which was intended to supplement and strengthen enforcement of antitrust laws. It added new forms of prohibited conduct, such as “mergers and acquisitions where the effect may substantially lessen competition”, and also gave state attorneys general the ability to enforce the federal antitrust laws. The Clayton Act has been amended several times over the years, first by the Robinson-Patman Act of 1936, to ban certain forums of discriminatory business conduct, and then again by the Hart-Scott-Rodin Act in 1976, to require companies intending to merge to notify the federal government before consummating the transaction in order to enable enforcement agencies to review the competitive effects of the merger.
In December 2022, Congress enacted the State Antitrust Enforcement Venue Act, codified in 28 U.S. C. § 1407(g), which exempts federal (and now also state) antitrust enforcement lawsuits from being transferred and consolidated into multidistrict litigation in order to allow these suits to protect the public from ongoing or future likely competitive injury as quickly as possible and serve as a way to streamline private actions to recover damages for any harm caused by conduct found in the government antitrust actions to violate antitrust laws.
II. Who Enforces the Antitrust Laws?
The antitrust laws are enforced by both public and private parties.
A. Government Enforcement
The United States Department of Justice Antitrust Division (“DOJ”) and the Federal Trade Commission (“FTC”) share responsibility for investigating and litigating alleged anticompetitive conduct and proposed mergers under federal antitrust law. While there is not a formal system by which the DOJ and the FTC divide their enforcement responsibilities, the agencies typically devote resources to particular industries where they have investigated or litigated in the past. For example, typically the DOJ will review mergers in transportation industries, such as airlines or railroads, as well as the telecommunications industry. The FTC generally focuses its enforcement responsibility in the oil and gas, pharmaceutical, and health care industries.
State attorneys general have authority to enforce both federal and their respective states’ antitrust laws. States investigating a matter arising under the federal antitrust laws may jointly investigate with either the DOJ or the FTC, or may conduct a separate investigation. Individuals or businesses that violate Washington state’s antitrust laws are subject to civil penalties as specified in RCW 19.86.140. In addition, the Washington attorney general has the authority to seek both non-monetary and monetary equitable relief and damages on behalf of both the State and its residents that have been directly or indirectly harmed, as well as costs of suit including reasonable attorney fees, as a result of violations of either the federal or state antitrust laws.
The Attorney General of Washington, through its Antitrust Division, is the primary enforcer of our state antitrust laws. As part of that responsibility, the Attorney General’s Office regularly conducts outreach to consumers, businesses, and trade groups to explain how antitrust laws are enforced and to underscore their importance.
B. Private Enforcement
The antitrust laws are also enforced by private parties. Under both federal and Washington state antitrust law, any person who is directly “injured in his business or property” by a violation of antitrust laws is entitled to bring an action in court. A prevailing plaintiff is eligible to recover treble damages, costs of suit, as well as attorneys’ fees. Additionally, private parties are also authorized to obtain injunctive relief to prevent threatened losses or damages. Because these antitrust actions are often aimed at business practices that affect interstate commerce, individual and proposed consumer or customer class action private antitrust actions often allege federal antitrust law violations and are subject to transfer and consolidation into multidistrict litigation before a single federal judge that could sit in any given federal district court across the nation that the federal Judicial Panel on Multidistrict Litigation deems appropriate.
III. What Do the Antitrust Laws Prohibit?
If you were to read through the Sherman Act, you would see that the Act is not at all explicit about what conduct is prohibited. The Clayton Act is a little more specific about conduct that may be illegal, but only when such conduct may substantially lessen competition, or tends to create a monopoly in any line of commerce, neither of which is defined in the statute. Because our state antitrust law substantially tracks the federal antitrust laws, the same interpretive issues arise under those statutes as well.
It turns out that when Congress enacted the Sherman Act, it intentionally left it to the courts to develop the substance of the Sherman Act, and to ultimately determine what should or should not be deemed illegal. Therefore, the Sherman Act is sparse, but in fact carries with it over 100 years’ worth of interpretation from the courts, antitrust enforcers, economists, and policy makers, making it a highly rich area of the law. Courts interpreting Washington antitrust law are to be guided by final decisions of the federal courts and final orders of the Federal Trade Commission interpreting the various federal statutes dealing with the same or similar matters. And in deciding whether conduct restrains or monopolizes trade or commerce or may substantially lessen competition the courts' determination of relevant market and the effective area of competition is not limited by the boundaries of the State of Washington. What follows will be a basic summary of the types of conduct for which it is now well established may raise concerns under antitrust laws.
As you read through these pages, it’s important to remember that one of the central tenants of antitrust law is the protection of competition, not competitors. In market economies, competition between firms necessarily produces winners and losers. The fact that a company has competed aggressively on the merits and caused another firm to go out of business is not itself a violation of antitrust laws; this may simply be the competitive process playing out precisely as it should.
A. Sherman Act Section 1 – Contracts, Combinations or Conspiracies in Restraint of Trade
The Sherman Act broadly prohibits “[e]very contract, combination, in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” Generally speaking, a restraint of trade is an agreement among two or more persons or entities that affects the competitive process. However, under this approach, even contracts for the purchase and sale of a single good would seem to be prohibited by antitrust laws. Therefore, courts have limited Section 1 of the Sherman Act (and accordingly, the corresponding section of our state antitrust law) as applying only to “unreasonable” restraints of trade. Over the years, three different methods have evolved to analyze conduct under Section 1. Courts now apply either (1) a per se analysis, (2) an intermediate "quick look" analysis; or (3) a broader rule of reason analysis to evaluate whether conduct violates Section 1 of the Sherman Act.
1. Per Se Offenses
It has become well settled over the years that certain forms of agreement among competitors are so harmful to competition and consumers that such conduct should be prohibited outright. The antitrust laws deem these types of offenses as per se illegal, because they will always or almost always result in consumer harm. Examples of per se offenses include price fixing, bid rigging, market and/or customer allocations and group boycotts.
As you read through the following discussion on per se offenses, it’s important to note that all of them require an agreement to be illegal under antitrust laws. An agreement, by definition, requires more than one person acting together; unilateral, independent business decisions will not meet the agreement requirement. An agreement does not have to be in a particular form; it can be proven by a written document, verbal exchanges, or even inferred from conduct (e.g., regular meetings between competitors followed by joint conduct immediately afterwards).
A. Price fixing. 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 services. Competitive terms that competitors may not agree to include anything from financing terms and warranties to discounts and shipping fees. What matters is whether there is an agreement, the effect of which is to directly or indirectly affect prices. Price fixing has long been recognized as per se illegal under the Sherman Act due to its harmful effect on competition and consumers.
EXAMPLE:
Firm A competes with Firm B. For the past several weeks, they have been engaged in a price war, with each firm attempting to undercut the other’s prices. Upset with the current market prices, Firm A’s CEO calls Firm B’s CEO and tells him that the low prices are endangering his business and that he can no longer cover his costs at the current price level. To save his company from going under, he offers not to undercut Firm B’s prices anymore if Firm B can agree to the same. Firm B’s CEO accepts and the price war ends. A’s and B’s agreement not to undercut the other’s prices constitutes a price fixing agreement under the Sherman Act. Because price fixing is per se illegal, it does not matter that Firm A made the agreement to save his company from going out of business; it is still illegal under the Sherman Act. It would also be illegal if non-CEO employees reached the same agreement.
It is not the case that all instances of seemingly similar pricing decisions are necessarily the result of price fixing; in many cases, businesses may simply be making unilateral business decisions due to external market factors. Therefore, in order to show the existence of an illegal agreement, antitrust laws require more than the mere parallel or similar conduct among competing firms.
EXAMPLE:
Q: I noticed that several gas stations in my area all raised their prices at the same time to within several cents of one another. In other cases, I’ve seen them lower their prices to roughly the same amount. Isn’t this price fixing?
A: On these facts alone, there is no evidence of price fixing. Price fixing requires evidence of an agreement, and here, there is nothing to suggest that each gas station isn’t independently setting its own price in response to external market forces, such as an increase in the cost of crude oil or cost of delivered fuel. High prices do not necessarily equate to price fixing.
B. Bid Rigging. Bid rigging refers to coordinated conduct among competing bidders that undermines the bidding process. One common form of bid rigging is an agreement among bidders as to who will win the bid.
EXAMPLE:
For the past several years, Firm A and Firm B have submitted competing bids for a government contract. This year, they decide together that Firm B will submit a bid superior to Firm A’s and that if Firm B is awarded the contract, it will subcontract part of the work to Firm A. This conduct is illegal under antitrust laws because A and B have agreed not to compete for the contract.
C. Market or Customer Allocations. A market or customer allocation is an agreement among businesses not to compete for customers. For example, an agreement to allocate or divide sale territories, assign certain customers to particular sellers, or reduce output would be per se illegal under the Sherman Act.
In some instances, limited non-compete agreements may be permissible when the agreement is ancillary to a larger transaction. For example, limited non-compete agreements are commonly entered into as part of a sale of a business, where the non-compete may be necessary to protect the value of the business. Notwithstanding these limited permissible uses of non-compete agreements, the non-compete agreement must still be reasonably limited in time and scope.
EXAMPLE:
Firms A and B are competing car dealerships. In order to boost their sales, they jointly decide that customers willing to spend above a certain dollar amount will be referred to Firm A, and customers wishing to spend below a certain dollar amount will be referred to Firm B. This agreement would be an illegal customer allocation.
D. Group boycotts. A per se group boycott is an agreement among competitors to engage in some form of concerted conduct, such as agreeing not to do business with a targeted individual or business, or only on certain agreed-upon terms.
EXAMPLE:
A and B are small widget manufacturers that sell their products through a large retailer C, and smaller retailer D. In order to increase its market share, D decides to offer a discount on A’s and B’s products. In response to D’s discount, C calls A and B and threatens to no longer carry A’s and B’s products if they permit D to discount. In response, A and B threaten to terminate D as a retailer unless D observes a specific price policy. A and B have engaged in an illegal boycott.
E. Tying Arrangements. A per se tying arrangement conditions the availability of one item (the “tying” item) upon the purchase of another item (the “tied” item). A tying arrangement is presumed to be illegal where (1) the tying and tied products are separate goods (rather than components of a single product), (2) the availability of the tying item is conditioned on the purchase (or rental or license of the tied item, as the case may be), and (3) the business imposing the tie is in a position to use its strength in the market for the tying item to harm competition in the market for the tied product.
EXAMPLE
Firm A is a monopolist in the hammer industry. Firm A is evaluating its strategic position and decides to begin producing its own nails. In order to promote its own line of nails, it requires consumers who purchase its hammer to also purchase its nails. After Firm A begins selling its hammer and nails together, other firms in the nail industry experience a significant decline in demand due to purchases of Firm A’s nails. Firm A has likely engaged in an illegal product tie because it has used its strength in the hammer industry to promote sales of its nails in a competitively unreasonable manner.
2. The Quick Look
The quick look approach applies to challenged conduct that courts have not yet recognized as being per se illegal, but such conduct is nevertheless "inherently suspect" because no elaborate industry or economic analysis is necessary for a reasonable factfinder to conclude that the conduct is likely to harm competition, consumers, customers, or workers because it is likely to eliminate significant competition; decrease output, choice, or quality; or artificially change the competitive price for consumers, customers, or workers. If the conduct is inherently suspect, courts will presume it to be anticompetitive absent a compelling showing that recognized procompetitive benefits are likely to timely outweigh its likely competitive harm in the particular situation.
3. The Rule of Reason
For other types of agreements among businesses, the effect on competition and consumers is not as clear as in the case of a per se or inherently suspect offense – the agreement may be anticompetitive, procompetitive, or competitively neutral. Under this scenario, evaluating whether the conduct is illegal or not requires an industry-specific economic analysis and balancing of the harms and benefits of the conduct at issue. If a court determines that the likely competitive harms of the agreement outweigh its any recognized procompetitive benefits likely to be timely realized from it, it is deemed an illegal restraint of trade.
There is a wide array of business arrangements that can be reviewed under the rule of reason, and it would not be practical to list them all here. Therefore, provided is a sample of some of the types of agreements that are reviewed under the rule of reason.
A. Restraints in the supply chain. A restraint in the supply chain refers to any agreement involving parties along the supply chain (e.g., supplier and wholesaler or supplier and retailer). Such restraints generally range from agreements on price or sales territory to how a retailer must display or market a supplier’s product. One form of such an agreement is resale price maintenance, which is an agreement on either a price floor (setting a minimum price that a retailer must charge for the supplier’s product) or a price ceiling (setting a maximum price that a retailer cannot charge above). Historically, both forms were considered per se illegal under the federal antitrust laws, but recently the courts have reversed course. In 1997, the Supreme Court held that there were sufficient procompetitive justifications for maximum resale price maintenance that it was no longer appropriate to view this conduct as always illegal. Similarly, in 2007, the Supreme Court held that there were sufficient procompetitive justifications for minimum resale price maintenance that no longer justified treating these agreements as per se illegal. However, either practice could still ultimately be found illegal under the rule of reason if there are sufficient anticompetitive effects associated with the agreement that outweigh any procompetitive benefits.
B. Exclusive Dealing. A common form of exclusive dealing is a contract between a supplier and retailer under which the retailer agrees to exclusively carry the supplier’s product. In general, the federal antitrust laws view these types of agreements as competitively neutral or even procompetitive, although it will vary from case to case. Exclusive dealing is most likely to be found illegal under federal and state antitrust laws where the one imposing the agreement has market power and uses the exclusive dealing contracts in a manner to distort competition or by making it more difficult for competitors to gain a foothold.
EXAMPLE
Q: I have a product that I want to sell at a local retailer. When I contacted the retailer, the manager told me that she is contractually obligated to carry only my competitor’s product. Isn’t this illegal?
A: Generally speaking, these types of exclusive distribution agreements would not be prohibited by antitrust laws. In general, antitrust laws accept the view that this type of exclusive dealing can be procompetitive if the product requires retailers to invest a certain amount of time and cost into learning, promoting, and/or servicing the product and otherwise making it attractive to and benefitting consumers, for which it is probably appropriate to compensate the retailer. In addition, exclusive dealing may not be problematic if a supplier has other outlets to sell its product.
B. Section 2 of the Sherman Act - Monopolization
In an effort to gain market share, businesses sometimes may employ forms of conduct or tactics that go beyond competition on the merits, and which may harm or distort normal competition. Sometimes such conduct may be justifiable if it is innovative and actually benefits consumers or has other recognized procompetitive benefits. However, if there is no valid justification for that conduct other than a business’s desire to reduce competition and or artificially change the competitive price for consumers, customers, or workers, antitrust laws operate to prohibit precisely this type of conduct.
Section 2 of the Sherman Act prohibits businesses from monopolizing, attempting to monopolize, or conspiring to monopolize trade or commerce. Practically speaking, this means that businesses are prohibited from engaging in competitively unreasonable conduct that would result in giving that business control over prices, restrict output, choice, or innovation, or engage in other anticompetitive conduct in a particular market. Note that, in contrast to Section 1 of the Sherman Act, Section 2 does not require that there be two entities acting together in a joint fashion, although Section 2 can apply to firms acting jointly. Thus, even a single firm acting alone can be found to violate Section 2 of the Sherman Act.
1. Defining the market and monopoly power
The first step in a Section 2 analysis is to determine what market the firm or firms are competing in. There are two dimensions to a relevant market: (1) a product market (what are the competing goods or services at issue?) and (2) a geographic market (where do those goods or services compete?). Determining what the markets are can be one of the most complex stages of an antitrust case and involves an in-depth study of the products and potential alternatives to those products, as well as whether there are geographic limitations to competition. For a more in-depth discussion of how antitrust enforcers define markets, see the discussion “Why and how are mergers reviewed?," under Section C, Anticompetitive Mergers and Acquisitions.
Once a market has been defined, the next step in the analysis is to determine whether a business possesses monopoly power within that market. Practically speaking, literal monopoly power is not required; what is required is that the firm be in a position to control prices or exclude competition within the market, which is simply referred to as “market power.” Antitrust enforcers use a number of means to show that a business has market power. A firm may have market power if it has a high market share and if it exhibits price leadership without corresponding changes in its market share, or if it has actually excluded other competitors from the market. In addition, a key component to determining whether a firm has market power is whether the industry is such that new firms can enter the market relatively easily and compete with existing firms; if there are no such “barriers to entry,” it is unlikely the case that a firm can really exercise market power.
A common misconception is that antitrust laws prohibit monopolies. It is true that antitrust laws prohibit firms from acquiring or maintaining monopoly power, but only when that power is obtained through competitively unreasonable conduct. It is not illegal to be a monopoly under antitrust laws, provided that monopoly status was obtained through legal, competitively reasonable conduct. It’s easy to imagine a scenario where this may be the case. Imagine a setting where there are two competing firms in a market. One firm invests a portion of its profits into research and development which it uses to innovate and eventually offer a superior product, while the other firm does not. Consumers find the new product far superior, and begin to purchase it exclusively. If the firm with the inferior product is forced to go out of business, that is the result of its own failure to compete vigorously, and not the result of illegal conduct (it is certainly not illegal to invest in one’s products with the hopes of offering a better one down the road). Although the remaining business effectively has a monopoly, it has achieved it through good business decisions and by offering a superior product.
2. Exclusionary Conduct
The next step in a Section 2 inquiry asks whether the firm has engaged in competitively reasonable or unreasonable conduct. In some cases, this can be a relatively straight forward determination. If the firm has engaged in a form of conduct that is already recognized as illegal under antitrust laws (such as group boycotts that give one market participant monopoly power to the exclusion of participants that would otherwise compete for consumers, customers, or workers) the conduct can be easily deemed exclusionary. Less clear are examples where the conduct is not independently illegal, but may nevertheless be competitively unreasonable. In these cases, a court will apply the same rule of reason analysis discussed earlier when analyzing restraints of trade that are not per se illegal. This analysis will consider such things as whether the conduct has impaired competition in an unnecessarily restrictive way, and whether there are any valid business justifications for the conduct. It bears repeating that a rule of reason analysis involves a complicated and highly fact-intensive balancing process that will depend on many factors, including the goods or services at issue, particular qualities of the market, and past conduct in the market.
C. Anticompetitive Mergers and Acquisitions
One of the most visible areas where antitrust law seeks to ensure competitive markets is through the merger review process. Washington’s Consumer Protection Act and the federal Clayton Antitrust Act prohibit mergers and acquisitions whose effect “may be substantially to lessen competition, or to tend to create a monopoly.” This provision gives antitrust enforcers the ability to seek a court order preventing businesses from merging in cases where the merger would substantially lessen competition by creating, enhancing, or facilitating the exercise of market power.
The announcement of a merger can be a headline grabbing event, particularly in cases of large public companies or where the transaction has been valued at a substantial amount. Generally speaking, there are three kinds of mergers: (1) a merger between direct competitors (referred to as a horizontal merger), (2) a merger of firms that operate at different levels in the supply chain (referred to as a vertical merger); and (3) a merger of firms that are neither direct competitors or part of the same supply chain (referred to as conglomerate, diagonal, or product-extension mergers).
1. The merger review process
The Hart-Scott-Rodino (HSR) Act requires companies intending to merge to file certain information with the federal government and establishes a series of timetables for federal antitrust enforcers in which to complete the merger review.
For a detailed explanation of the merger review process under federal law, visit the FTC’s website at http://www.ftc.gov/bc/antitrust/mergers.shtm.
In 2019, a new statute was enacted in Washington State that required prior notice to the Attorney General of certain transactions in health care markets. The notice requirement provides the Antitrust Division of the Attorney General the information necessary to determine whether an investigation is warranted for potential anticompetitive conduct and consumer harm, ensuring that competition in health care markets across Washington remains vigorous and robust. For more information, visit our Healthcare Transactions Notification Requirement page.
Additionally in 2025, Washington became the first state to enact the Uniform Antitrust Premerger Notification Act, which requires certain entities that file a HSR premerger notification with the federal government to contemporaneously file an HSR premerger notification with the AGO.
The premerger notification requirement applies to companies or individuals that:
- Have a principal place of business in Washington state,
- Directly or indirectly have annual net sales in this state of goods or services involved in the proposed merger transaction of at least 20 percent of the HSR filing threshold, or
- Are health care providers or a provider organization as defined in RCW 19.390.020, conducting business in the state.
The law includes an additional requirement for companies or individuals that have their principal place of business in Washington. Those entities must include all the attachments, in addition to the HSR form, when they file the premerger notification to the AGO.
Responses to common questions can be found at Premerger Notifications | Washington State.
Even before it enacted these two pre-closing transaction notification statutes, the Washington Attorney General has investigated and challenged proposed and consummated mergers under state and federal antitrust laws.
2. Why and how are mergers reviewed?
Many mergers do not raise substantial anticompetitive concerns. For example, a merger involving a supplier that seeks to purchase a large distributor may not be anticompetitive if it would allow the supplier to sell its goods to consumers directly at a lower cost. On the other hand, there are a number of scenarios where a merger may have the potential to harm competition. If a merger would eliminate a competitor in an industry where there are already only a few firms competing, the merger may enhance the ability of the remaining firms to engage in some level of anticompetitive coordination, to the detriment of consumers. A merger may also be harmful if it would effectively result in one firm in a particular industry obtaining or enhancing its market power (a so-called “merger to monopoly”).
To determine whether a merger may harm competition, the basic question antitrust enforcers must answer is whether the merger would substantially lessen competition in the affected product market within a certain geography. For example, if two companies both produce a special type of running shoe designed for long distance marathons and offer it for sale in stores across the country, and there is evidence that consumers see only those products as each other’s alternatives (meaning if the price of one were to increase consumers would likely respond by purchasing more of the other) a merger of those two firms may harm competition for consumers. On the other hand, if one company only produced a special running shoe for long distance marathons and the other only produced women’s dress shoes, it would likely not be the case that consumers view these products as substitutes, and a merger between the two companies likely would not harm competition. The examples presented here are straightforward and easy to understand; in a real case, ascertaining the product and geographic markets normally requires extensive review of the companies’ documents describing their products and market conditions, and interviews (formal or informal) with participants in the industry, as well as understanding any barriers to entry or long term benefits to the merger. It may also be necessary to consult with an economist to determine whether there is empirical evidence of consumers’ switching or other harms to competition.
Note: This document is not intended to be a comprehensive summary or statement of federal or state antitrust laws, and it should not be construed as a legal conclusion, legal advice or as an official statement of opinion of the Office of the Attorney General of Washington.