United States has several laws that ensure that competition among businesses flow rely and new competitors get free access to the market. These laws intend to ensure fair and balanced competitive business practices. However, there are times when some businesses will do anything to gain competitive edge. USA has strong antitrust laws that prohibit fixing market price, price discrimination, conspiring boycott, monopolizing, and adopting unfair business practices. The history of Antitrust laws goes back to 1890 when Congress passed Sherman Act. In 1914, Congress passed two more acts: Federal Trade Commission Act, and Clayton Act. With some revisions, these three acts are still core antitrust acts.
The Sherman Act outlaws every contract, combination or conspiracy in restraint of trade. It also prohibits any attempt to monopolize. The Sherman Act enforcement can be civil or criminal. The criminal penalty can be up to $1 million for an individual and $100 million for a corporation. The Federal Trade Commission Act bans unfair methods of competition and deceptive acts or practices. Violation of Sherman Act also violates Federal Trade Commission Act. The Sherman Act and Federal Trade Commission Act are very effective, but they do not address certain specific practices. The Clayton Act addresses some specific practices such as mergers and interlocking directorates. For example, Section 7 of Clayton Act prohibits mergers and acquisitions that lessen competition or tend to create monopoly. Apart from these three core antitrust acts, most states also have antitrust laws. (FTC, 2014)
Apart from Antitrust laws, there are several other laws that promote fair business practices. The Robinson-Patman Act prohibits price discrimination. This act ...
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...efits from adopting unfair business practices and discouraging competition are much higher than the expected penalty and punishment. With changing time, there is need to make these laws more effective and relevant.
Works Cited
FTC. (2014). FTC Announces Top National Consumer Complaints for 2013. Retrieved From: http://www.ftc.gov/news-events/press-releases/2014/02/ftc-announces-top-national-consumer-complaints-2013
FTC. (2014). The Antitrust Laws. Retrieved From: http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws
No Author. Antitrust Law Examples: Are They Helpful to the Free Marketplace. Retrieved From: http://www.antitrustlaws.org/Antitrust-Law-Examples.html
Samozain. (2013). Laws to Promote Fair and Competitive Practices. Retrieved From: http://business-basics.org/laws-to-promote-fair-and-competitie-practices/
Unfortunately, these monopolies allowed companies to raise prices without consequence, as there was no other source of product for consumers to buy for cheaper. The more competition, the more a company is forced to appeal to the consumer, but monopolies allowed corporations to treat consumers awfully and still receive their business. Trusts were bad for both the consumers and the workers, but without proper representation, they could do nothing. However, with petitions, citizens got the first anti-trust law passed by the not entirely corrupt Congress, called the Sherman Act of 1890. It prevented companies from trade cooperation of any kind, whether good or bad. Most corporate lawyers were able to find loopholes in the law, and it was largely ineffective. Over time, the Sherman Anti-Trust Act of 1890, and the previously passed Interstate Commerce Act of 1887, which regulated railroad rates, grew more slightly effective, but it would take more to cripple powerful
Many businesses used this new process to raise the price of their competitors. They did this by putting constraints on entry restrictions (Woods 1986). At the state level, other laws were put in place to support the Food and Drug Act mainly to help local and area producers who were and would be facing new nat...
Additionally, in an effort to establish and standardize fair trade practices in interstate and international commerce, the government enacted laws that were directed toward labor unions and the labor relations process. These laws have either benefited or were detrimental to labor organizations.
middle of paper ... ... Also, some railroads gave special rates to some shippers in exchange that the shippers continued doing business with the railroad company. In the Clayton Antitrust Act, it said no one in commerce could regulate rates of price between different buyers (Document E). It said that otherwise, this would create a monopoly in any line of commerce. However, the Elkins Act of 1903 pushed heavy fines on the companies that did that.
9. Sherman Anti-Trust Act – 1890 – forbade combinations in restraint of trade, without any distinction between “good” and “bad” trusts.
The Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914 are two things that work together to help explain and prohibit things that people believe are wrong in the world and definitely hurts peoples and the governments wallets.
The Sherman Antitrust Act of 1890 was an early attempt to try to control abuses by large combinations of businesses called trusts. The Act was weakened by the Supreme Court used against labor unions rather than against monopolies. Roosevelt’s first push for reform on the national level began with a secret antitrust investigation of the J. P. Morgan’s Northern Securities Company whom monopolized railroad traffic. After successfully using his powers in government to control businesses, Roosevelt used the Sherman Antitrust Act against forty-three “bad” trusts that broke the law and left the “good” trusts alone.
In an attempt to decrease competition in the computer technology industry, Microsoft had violated the Sherman Antitrust. In the 1998 case of U.S. vs. Microsoft, the Microsoft company was charged for anticompetitive and monopolistic practices that violated antitrust laws. The plaintiff had claimed that Microsoft had engaged “in a series of exclusionary, anticompetitive, and predatory acts to maintain its monopoly power” (Excerpts) which went against Section 2 of the antitrust law. Microsoft had also allegedly violated Section 1 by “tying its browser to its operating system and entering into exclusive dealing arrangements” which was ruled as a “combination… in restraint of trade or commerce” (Excerpts). The Court ruled against Microsoft, exemplifying the ability of the Sherman Antitrust to curb unethical and illegal monopolistic operations even in modern
These laws enforcement it makes the company have more expenditure and affect to the profit in operation of company as well (Ebsco, 2015).
As one commentator has explained, the Robinson-Patman Act “was designed to protect small businesses from larger, more efficient businesses. A necessary result is higher consumer prices.” Moreover, the Act ironically appears increasingly to be ineffective even in protecting small businesses. Over time, many businesses have found ways to comply with the Act by, for example, differentiating products, so they can sell somewhat different products to different purchasers at different prices. Such methods are likely to increase the seller’s costs—and thus increase costs to consumers—but do nothing to protect small businesses. The Act generally appears to have failed in achieving its main
In 1914, the Clayton Act was passed in conjunction with the Sherman Anti-trust Act to assist with anti-trust cases. The Clayton Act prohibited price discrimination between different purchasers if such discrimination substantially lessens competition or tends to create a monopoly ion any line of commerce. The Act also prohibits sales on the condition that the buyer or leaser not deal with the competitors of the seller or lesser “exclusive dealings”, or that the buyer also purchases another different product, but only when these acts substantially lessen competition. Mergers and acquisitions where the effect may substantially lessen competition are prohibited also by the act. The last prohibition of the act is that no person can be the director of two or more competing corporations.
Competition law in the European Union has developed from being an uncertain preoccupation of a few economists, lawyers and officials to one of the leading competition law system in the globe. Nonetheless, in agreement with most commentators, there are inherent flaws within the EU Commission’s procedures. This paper aims to provide an account of concerns in the current system, drawing comments from scholars and EU officials in order to demonstrate both benefits and shortcomings of the system. An overview of the legal and policy debate of the current EU Competition enforcement will be presented as the introduction. Policy concerns such as prosecutorial bias and self-incrimination in enforcement powers will be the main subjects for the purpose of this paper, followed by analysis of the EU commission structure, in particular checks and balances and the hearing process, both of which have been claimed being incompatible with the ECHR. A comparison with the US Antitrust system will also be paralleled through out this essay in order to demonstrate a clearer examination. This essay will conclude with the Commission’s flaws that have effected on the upcoming UK competition law reforms.
We need a fundamental reassessment of our antitrust laws” (citation). Antitrust laws are laws placed to prevent monopolies and businesses becoming too powerful. He believes that the government should be there to regulate a healthy competitive market. Furthermore, he suggests that the government should invest in the capital of America “Our government must enact legislation to attract more capital into industrial investment” (citation). He wants the government to be weary of becoming to oppressive but also wants the government protect competitive market
Substantive and Procedural Law – Substantive laws are the social rights and duties of people, and procedural law are guidelines through which government bodies or courts deal with breaches in substantive law. E.g. substantive law would state that hitting someone with a car and driving off is a crime, while procedural law would define how the courts could try and sentence in the case.
INTEGRATING BUSINESS PERSPECTIVES “The legal regulation of business is a necessary evil in the Australian business environment”. Discuss the arguments for and against this statement using examples of where the law has enhanced and hindered business. Regulating businesses through the law, allows Australian businesses to flourish, while at the same time, ensuring that all involved are protected. While there are downfalls to the regulation of businesses, the overall benefits of legal regulation, far outweigh the damages caused. This is seen in the case of the Australian Competition and Consumer Commission (ACCC) in which business rights are mandated to ensure a fair business environment for all.