Antitrust Law

Examples of Antitrust Law in the following topics:

• Regulation and Antitrust Policy

  • Antitrust laws are a form of marketplace regulation intended to prohibit monopolization and unfair business practices.
  • U.S. antitrust law is a body of law that prohibits anti-competitive behavior (monopolization) and unfair business practices.
  • Government agencies known as competition regulators, along with private litigants, apply the antitrust and consumer protection laws in hopes of preventing market failure.
  • Many countries, including most of the Western world, have antitrust laws of some form.
  • Several types of organizations are exempt from federal antitrust laws, including labor unions, agricultural cooperatives, and banks.

• Antitrust Laws

  • Antitrust laws ensure that competitive environments are preserved in order to maintain an efficient and equitable capitalistic system.
  • Antitrust law is in place to ensure such circumstances do not arise, or when they do that they are regulated appropriate to minimize adverse societal effects.
  • While these antitrust laws differ from nation to nation, they can loosely be summarized in three components:
  • This act was expanded upon in 1914, with two more competitive laws: The Clayton Antitrust Act and the Federal Trade Commission Act.
  • Discuss antitrust laws aimed to improve competition and prevent monopolies from becoming more powerful

• Anti-Trust Laws

  • However, the Supreme Court declared that the law was unconstitutional in 1918.
  • The Clayton Antitrust Act was a law that specified and outlined "unfair and illegal" certain business practices such as price discrimination, agreements prohibiting retailers from handling other companies' products, and agreements to control other companies.
  • It was a stronger piece of legislation than other antitrust laws because it held individual officers of corporations responsible if their companies violated the laws.
  • This was seen as a dramatic improvement over the more ambiguous language of previous antitrust legislation.
  • Wilson uses tariff, currency and anti-trust laws to prime the pump and get the economy working in a 1913 political cartoon.

• Price Fixing

  • Under American law, even exchanging prices among competitors can violate the antitrust laws.
  • When the agreement to control price is sanctioned by a multilateral treaty or is entered by sovereign nations as opposed to individual firms, the cartel may be protected from lawsuits and criminal antitrust prosecution.
  • This explains, for example, why OPEC, the global petroleum cartel, has not been prosecuted or successfully sued under US. antitrust law.
  • International airline tickets have their prices fixed by agreement with the IATA, a practice for which there is a specific exemption in antitrust law.

• Regulation

  • Congress enacted a law regulating railroads in 1887 (the Interstate Commerce Act), and one preventing large firms from controlling a single industry in 1890 (the Sherman Antitrust Act).
  • United States antitrust law is the body of laws that prohibits anti-competitive behavior (monopoly) and unfair business practices.
  • The Sherman Antitrust Act is a landmark federal statute in the history of United States antitrust law passed by Congress in 1890.
  • Public officials during the Progressive Era put passing and enforcing strong antitrust high on their agenda.
  • Standard Oil (Refinery No. 1 in Cleveland, Ohio, pictured) was a major company broken up under United States antitrust laws.

• Federal Efforts to Control Monopoly

  • In 1914, Congress passed two more laws designed to bolster the Sherman Antitrust Act: the Clayton Antitrust Act and the Federal Trade Commission Act.
  • The Clayton Antitrust Act defined more clearly what constituted illegal restraint of trade.
  • The government has continued to pursue antitrust prosecutions since World War II.
  • As these examples demonstrate, it is not always easy to define when a violation of antitrust laws occurs.
  • Interpretations of the laws have varied, and analysts often disagree in assessing whether companies have gained so much power that they can interfere with the workings of the market.

• Wilsonian Progressivism

  • Included among these were the Federal Reserve Act, Federal Trade Commission Act, the Clayton Antitrust Act, and the Federal Farm Loan Act.
  • The Federal Trade Commission effectively restricted unfair trade practices and enforced the 1914 Clayton Antitrust Act.
  • The Clayton Antitrust Act was a law that specified and outlined "unfair and illegal" certain business practices such as price discrimination, agreements prohibiting retailers from handling other companies' products, and agreements to control other companies.
  • It was a stronger piece of legislation than other antitrust laws because it held individual officers of corporations responsible if their companies violated the laws.
  • This was seen as a dramatic improvement over the more ambiguous language of previous antitrust legislation.

• Monopolies, Mergers, and Restructuring

  • Such concerns gave rise to two major laws aimed at taking apart or preventing monopolies: the Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914.
  • Government continued to use these laws to limit monopolies throughout the 20th century.
  • While antitrust laws may have increased competition, they have not kept U.S. companies from getting bigger.
  • That represented one of the largest divestitures ever mandated by antitrust agencies.
  • But federal antitrust agencies have given their blessings to some joint ventures they believe will yield benefits.

• Rockefeller and the Oil Industry

  • In 1890, Congress passed the Sherman Antitrust Act — the source of all American anti-monopoly laws.
  • The law forbade every contract, scheme, deal, or conspiracy to restrain trade, though the phrase "restraint of trade" remained subjective.
  • The Standard Oil group quickly attracted attention from antitrust authorities leading to a lawsuit filed by Ohio Attorney General David K.
  • In 1909, the US Department of Justice sued Standard under federal anti-trust law, the Sherman Antitrust Act of 1890, for sustaining a monopoly and restraining interstate commerce.
  • On May 15, 1911, the US Supreme Court upheld the lower court judgment and declared the Standard Oil group to be an "unreasonable" monopoly under the Sherman Antitrust Act.

• What is legal risk?

  • Generally, all laws in the host country will apply to an entrepreneur's local business operations.
  • Examples include filing procedures, employment law, environmental law, tax law, and ownership requirements.
  • The World Bank has a rather extensive country business law library which can be accessed from their website.
  • Applicable laws differ from country to country, but one common extension is employment law.
  • In anti-trust for instance, the United States law covers only situations where the violation affects the US, (meaning that it does not matter where the act causing the violation took place), while the EU considers only where the antitrust offense was implemented (Shaffer et al., 2005, pgs 657-664).