Anti-Competitive Business Practices: FTC’s Claims Against Raging Bull

Subject: Case Studies
Pages: 2
Words: 562
Reading time:
2 min
Study level: Master

Anti-competitive practices presume violation of competition norms by monopolies by seizing a dominant position in the market, which allows restricting access to it by other producers, dictating prices, and other conditions of commercial activity. They usually include such activities as price-fixing, boycotts, and exclusive contracts for complete transactions. Anti-competitive practices are generally considered illegal only when such practices lead to a significant weakening of competition. A monopoly or any other dominant firm’s presence is necessary for the market to punish a firn for implementing anti-competitive behavior.

In 2020 the FTC sued the stock trading organization Raging Bull and its founder Jeffrey Bishop. The plaintiff alleged that Raging Bull used banned marketing practices making its profits unbelievably high and frauding the clients (FTC v. RagingBull.com, 2020). According to the complaint, the stock trading company became a monopoly among other asset organizations due to the investment of billions of dollars in deceptive marketing strategies (FTC v. RagingBull.com, 2020). By spreading information about their activity, they involved customers who were ready to pour more money into illegal transactions leading Raging Bull to become the largest stock company on the market. Hence, by implementing such antitrust practices, the firm was accused of trespassing FTC’s standards.

The FTC claims that Raging Bull acts illegally can be justified because it is not allowed to implement deceptive marketing means, which leads to further fraud and monopolization. Since Raging Bull intentionally targeted customers from many sides, its actions were considered anti-competitive. In addition, the company used illegitimate agreements, threats, and other exclusion tactics (FTC v. RagingBull.com, 2020). The company also developed steps to reduce its expenses and involve customers in illegal financial operations.

Trade restrictions can be divided into two types – horizontal and vertical. The horizontal restraint includes direct competitors of the same level in a particular industry, while a vertical one involves participants whose competitors have different levels of company development. Therefore, a horizontal contract between manufacturers, retailers, or wholesalers can be concluded, but it does not involve participants from different groups. Other illegitimate deeds similar to the price-setting restraint include falsifying identity cards, territorial imposition, boycotts, and introducing minimum tariffs.

In turn, the vertical restraint is comprised of participants from one or more areas – the manufacturer, wholesaler, and retailer. These distinctions become difficult to make in specific factual situations. For example, while the horizontal distribution of the market is illegal in itself, while t the vertical distribution of the market is subject to a test of reasonableness. A vertical restriction takes place when a company gains control over another industry or plant which was previously its client or supplier. The dominating company is endowed with the right to impose certain anti-competitive limitations on the business created or developed by it. Some examples of vertical trade restrictions include: creating a monopoly, forcing another business to refrain from competing with one’s company, or illegal obstruction of a business transaction.

Hence, it can be concluded that FTC’s claims against Raging Bull were justified as the stock trading company’s actions were illegal. The antitrust practices and usage of multiple technological means and online platforms to attract more people into investment transactions caused damage to the company. Raging Bull anti-competitive and antitrade methods, which are illegitimate in terms of fair and competitive trade. If the company had not used unlawful restraints, its deeds would not have been against the standard competition.

Reference

FTC v. RagingBull.com LLC, 1:20-cv-03538 (Ind. 2020). Web.