Legal Definitions - per se violation

A per se violation refers to a type of conduct, particularly in antitrust law, that is considered so inherently harmful to competition and the public interest that it is automatically deemed illegal. For such actions, the law presumes they are unlawful without requiring proof that they actually caused damage to the market or consumers. The mere act of engaging in the prohibited conduct is enough to establish a violation.

Here are some examples to illustrate this concept:

• Example 1: Bid Rigging

  Imagine two major landscaping companies, "GreenThumb Inc." and "LawnPros LLC," are the only two qualified bidders for a large municipal park maintenance contract. Instead of competing fairly, their executives meet secretly and agree that GreenThumb Inc. will submit a very high, non-competitive bid, ensuring LawnPros LLC wins the contract. In return, LawnPros LLC agrees to subcontract a portion of the work to GreenThumb Inc. at an inflated price on a future project.

  This agreement constitutes a per se violation. The law views bid rigging as so fundamentally destructive to fair competition that the government does not need to prove that the city actually paid more for the park maintenance or that other potential bidders were harmed. The very act of these competitors agreeing to manipulate the bidding process is sufficient to establish an illegal act.

• Example 2: Market Allocation

  Consider two independent dry cleaning businesses, "Sparkle Cleaners" and "Fresh Press," operating in adjacent neighborhoods within the same city. To avoid direct competition, the owners agree that Sparkle Cleaners will only serve customers residing north of Main Street, and Fresh Press will only serve customers south of Main Street. They explicitly refuse to accept customers from each other's designated territories.

  This agreement to divide territories is a per se violation. The law considers such market allocation agreements inherently anticompetitive because they eliminate competition between the parties. There is no need to demonstrate that consumers in either neighborhood faced higher prices or fewer choices; the agreement itself, to carve up the market and not compete, is enough to be deemed illegal.