Illegal Antitrust Laws
In the United States, antitrust law is a set of federal and state laws designed to govern the conduct and organization of business enterprises and, in general, to promote competition for the benefit of consumers. The most important pieces of legislation are the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914. These laws serve three main functions. First, Section 1 of the Sherman Act prohibits price-fixing and cartel conduct, as well as other collusive practices that unduly restrict trade. Second, Section 7 of the Clayton Act restricts mergers and acquisitions of organizations that are likely to significantly lessen competition. Third, section 2 of the Sherman Act prohibits the abuse of monopoly power. [2] No introduction to antitrust law would be complete without dealing with mergers and acquisitions. We can divide them into horizontal, vertical and potential competitive mergers. Basically, antitrust provisions aim to maximise the public interest of consumers. Proponents of the Sherman Act, the Federal Trade Commission Act, and the Clayton Antitrust Act argue that since their introduction, these antitrust laws have protected consumers and competitors from market manipulation stemming from corporate greed. Through civil and criminal enforcement, antitrust laws aim to stop price and bid manipulation, monopolization, and anti-competitive mergers and acquisitions. To analyze whether a particular restriction is unreasonable under federal antitrust laws, a court uses one of three approaches: Antitrust laws apply to a variety of questionable business activities, including, but not limited to, market sharing, bidding, price fixing, and monopolies.
Below, we look at the activities these laws protect against. The New York State Attorney General enforces state and federal antitrust laws through the Antitrust Bureau. Antitrust laws have been called the “Bill of Rights” and the “Magna Carta” of the American free enterprise system. Strong antitrust enforcement ensures the ability of companies to compete in an open market and provides consumers with better quality goods and services at lower prices. Antitrust laws are designed to ensure that the industry is competitive, with a number of manufacturers or distributors of a product or service, all eager to attract customers. The nature of our free market economy requires competing firms to lower prices and improve quality to attract customers. To make a profit, companies must try to reduce their costs. Competition encourages companies to run their operations more efficiently and allows U.S. companies to compete in a global economy. Experience shows that when competition is limited, prices can increase and quality can suffer. If a company has no competition, it has little incentive to improve its quality, lower its prices or become more efficient. If there is only one seller in the market, they can charge higher prices without fear of competition.
Antitrust laws aim to protect the purchasing power of consumers while saving jobs and businesses. How? Companies may believe that by restricting competition among themselves, they will achieve higher profits in the short term. Of course, this hurts consumers by driving up prices; In addition, it usually proves disastrous for the companies themselves. Strong competitors from another state, region or country end up entering the market and taking business from the local seller, who has become inefficient and weak due to lack of competition. A long-term consequence of limited competition is business bankruptcy and the loss of local jobs. Competition also has other advantages. It serves as a check on economic power and creates opportunities for individuals to enter the market and run their own businesses. It creates jobs and gives people a choice between employer and workplace. It reduces the need for government intervention by over-regulating the economy.
The free market for goods and services is an essential element of individual freedom in this country. The following information on these laws is taken from Antitrust Enforcement and the Consumer Guide. The FTC enforces federal antitrust laws and focuses on economic segments where consumer spending is high, including healthcare, drugs, food, energy, technology, and everything related to digital communications. Factors that could trigger an FTC investigation include pre-merger filings, certain consumer or business correspondence, congressional investigations, or articles on consumer or economic topics. Most antitrust complaints are analyzed after this test, after which the courts must decide whether they constitute an unreasonable restriction of competition. In doing so, judges consider a variety of factors, including (i) the intent and purpose of accepting the restriction; (ii) the competitive position of the defendant, including information on the transaction in question, its state before and after the imposition of the restriction and the history, nature and effect of the restriction; (Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S.
717 (1988); National Collegiate Athletic Ass`n v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984); (iii) the structure and conditions of competition of the relevant market (State Oil v. Kahn, 522 U.S. 3, 10 (1997)); (iv) barriers to entry; and (v) the existence of an objective justification for the restriction (California Dental Ass`n v.
