In what ways are Californias antitrust and trade regulation laws different from the federal laws?
UPDATED: February 8, 2009
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Although California courts often look to federal law for guidance in interpreting the California antitrust and trade regulation laws, they often reach somewhat different results. For one thing, federal law only deals with offenses that occur in interstate commerce; California law covers offenses in both interstate and California commerce, so long as they take place or affect commerce within California. Among the other more important differences are the following.
- Federal antitrust law does not allow recovery by an indirect purchaser. An indirect purchaser is someone who did not buy the good or service that is the subject of the antitrust offense directly from the wrongdoer. California law expressly allows an indirect purchaser to sue and recover.
- California antitrust law, unlike federal law, does not expressly prohibit monopolization, or mergers that might lessen competition.
- The California Unfair Practices Act prohibits somewhat different practices from the federal Robinson-Patman Act. The federal act forbids price discrimination that limits competition. The California Act prohibits sales below cost undertaken with a purpose to injure competitors or destroy competition, price discrimination between different localities undertaken with an intent to injure competitors, and secret rebates that are given to some purchasers but not to others and that are injurious to competition.
- The Federal Trade Commission Act can be enforced only by the Federal Trade Commission, an administrative agency. The California Unfair Practices Act allows suits by private parties to be brought in the state courts. The Federal Trade Commission in 1983 adopted a policy to challenge advertising "likely to mislead consumers acting reasonably in the circumstances as to a material fact." The California courts in interpreting the Unfair Advertising Statute have not to date adopted this formulation.