Restraint of trade is anything that impedes or restricts normal business activities. Many nations have laws that prohibit this, with antitrust laws being a widespread example. In nations where there are no laws in place to prevent it, these practices may limit the function of businesses and such nations may potentially be viewed as hostile business climates for new companies because they would have a difficult time becoming established. Countries that lack these types of laws may be required to enact them before joining economic pacts, treaties, or agreements so that they are not unfairly positioned in relation to other nations in such agreements.
A number of activities may be considered restraint of trade, and anything that impedes trade, transport, and related activities, for example, could potentially be barred by law. Monopolies, price fixing, and other tactics used to inhibit competition are also examples. Things that might interfere with the functions of the free market can also potentially be considered restraint of trade.
Some things which people might think of as restraint of trade are actually not classified as such. For example, no compete clauses are not illegal under such laws. These clauses are considered reasonable because a business has a legitimate interest and concern and it wants to protect things like trade secrets. However, a no compete clause can be challenged on the grounds that it is too broad or impedes someone's ability to work.
Governments may pursue antitrust actions when they believe that companies are engaging in restraint of trade that could hurt the economy or damage businesses. Likewise, businesses may also bring suit against each other on these grounds. For example, an independent gas station could sue a corporation on the grounds of price fixing, arguing that it is using business practices which interfere with the independent station's ability to do business.
Legal professionals who specialize in handling restraint of trade cases and other cases related to business practices can provide consultation for companies concerned about this issue, including legal consultation for companies that may be fighting suits accusing them of inappropriate business practices such as price fixing, or challenges to planned mergers on the grounds of concerns about monopolies. Legal departments within major companies also usually provide advice and recommendations before such companies move forward on deals and other activities, confirming that such actions will not violate the law.
