Due to increasing consumer resentment towards ever-increasing monopolistic industries in the late 1800’s and early 1900’s, the government formulated antitrust laws to allow for a more competitive market. The legislations prohibit anticompetitive business practices such as price fixing, bid rigging, monopolization, and tying contracts.
• Sherman Act of 1890—considered the cornerstone of antitrust legislation, had two major components:
o “Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations is declared to be illegal.”
o “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony” (later changed from “misdemeanor”). (McConnell, Brue & Flynn, 2012)
The Sherman Act was created to prohibit practices such as price-fixing amongst competitors as well as monopolization. The act appeared to provide a solid base to combat against business monopolies, but early court interpretations limited the scope of the act and created ambiguities of the law.
• Clayton Act of 1914—expanded upon and helped clarify the intent of the existing Sherman Act, with 4 major components:
o Section 2 outlaws price discrimination when it isn’t justified on the basis of cost differences and when it reduces competition.
o Section 3 prohibits tying contracts, where a producer requires that a buyer purchase another (or others) of its products as a condition for getting the desired good or service
o Section 7 prohibits firms from purchasing stocks of competing compani...
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... 1971 to oversee industrial health and safety in the workplace, as well as conduct inspections and investigations to determine whether employers are complying with standards
• The EPA (Environmental Protection Agency) was established in 1972 to oversee air, water, and noise pollution and to pass regulations to control actions that could cause them.
• The CPSC (Consumer Product Safety Commission) was established in 1972 to oversee the safety of consumer products and holds the responsibility of protecting the American public from consumer products that have the capability of causing unreasonable injury or death. (McConnell, Brue & Flynn, 2012)
Works Cited
McConnell, C., Brue, S., & Flynn, S. (2012).Economics: principles, problems, and policies. (19 ed., p. 375-390). McGraw-Hill/Irwin. Retrieved from http://online.vitalsource.com/books/0077771699/id/L4-1-1
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
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.
Brue, S. L., Flynn, S. M., & McConnell, C. R. (2011).Economics principles, problems and policies. (19 ed.). New
“Oligopoly is an imperfect monopoly” by John Kenneth Galbraith. As we all know the presence of monopolies is just giving the owner an opportunity to control an unfair market for everyone participating. Mr. Galbraith’s quote is strictly stating that oligopolies are just a different way of drawing up an identical game plan to control a particular market. This falls right into the conversation about the Packers and Stockyards Act of 1921 as it relates to why it was created, its relevance today, and how we can apply it to today’s marketplace.
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.
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...
An antitrust violation is a violation of the “laws designed to protect trade and commerce from abusive practice such as price-fixing, restraints, price discrimination and monopolization” (“Antitrust Violations / Wex Legal Dictionary/ Encyclopedia /LII / Legal Information Institute”, (n.d)). In looking at a company that has been investigated for antitrust behavior, identification of any pecuniary or non-pecuniary cost, along with any specific antitrust act violation will be examined. The examination of these findings will provide an insight into whether monopolies and oligopolies impact society negatively. Finally, an example of how a monopolistic or oligopolistic company can benefit society will be revealed.
1614). The courts have already interfered with monopsonies, setting precedents on cases such as Mandeville Island Farms v. American Crystal Sugar Co., which stated that “collusive monopsonies – are illegal, even where harm to consumers is neither shown nor alleged” (Alexander, 2007 p. 1622). Even with such precedents set through the courts, “the legal standards for monopsony claims are [still] less developed than for monopoly claims (Stucke, 2013 p. 1513). Ways that government might intervene and pose interference with monopsony is passing legislation to control mergers and imposing price and profit regulations, such as setting a minimum price level.
The primary purpose of the “Statute of Frauds” (SOF) is to protect the interests of parties once they are involved in litigating a contract dispute (Spagnola, 2008). The relevant statutes are reliant upon state jurisdictions to determine whether the contract falls under the SOF, and whether the writing of the contract satisfies the requirements of the statute of frauds (Spagnola, 2008). However, all contracts are not covered under the SOF. In essence, for a contract to be deemed as legal by definition of the SOF, there must be verification of the following requirements for formation of the contract, which are as follows: (1) There must be least two parties to the contract, (2) There must be a mutual agreement and acceptance on the price to pay for goods and services offered, (3) The subject matter or reason for entering the contract, must be clearly understood by all parties to the contract, (4) and there must be a stipulated time for performance of duties under the contractual obligations (Spagnola, 2008). Lastly, there are five categories of contracts that are covered under the SOF, which are as follows: (1) The transfer of real property interests, (2) Contracts that are not performable within one year, (3) Contracts in consideration of marriage, (4) Surtees and guarantees (answering to the debt of another), and (5) Uniform Commercial Code (U.C.C.) provisions regarding the sale of goods or services, legally valued over five hundred dollars ($500.00) (Spagnola, 2008).
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
In the years that followed Reconstruction many issues came up including whether laissez-faire was the correct system to follow. Because of problems like that remained unsettled for some time industrial leaders began to pop up and create overpowering monopolies. Just like what Walmart is considered today. Monopolies could lower prices to a degree at which smaller businesses could not compete. This would allow them to buy out a smaller company and lower competition. In today’s world we value competition because we know it is what makes prices lower. It is what allows smaller businesses to get into the market and provide new knowledge to the same concepts. It is what allows new companies to gain momentum and have the means to develop new methods. In the gilded age freedom was valued over equality. Those who could rise would rise, crushing those they surpassed.
O'Sullivan, A., & Sheffrin, S. (2005). Economics. Upper Saddle River, New Jersey: Pearson Prentice Hall.
In the early 1900s industrial accidents were commonplace in this country; for example, in 1907 over 3,200 people were killed in mining accidents. At this time legislation and public opinion all favored management. There were few protections for the worker's safety. Today's industrial employees are better off than their colleagues in the past. Their chances of being killed in an industrial accident are less than half of that of their predecessors of 60 years ago. According to National safety Council (NSC), the current death rate from work-related injuries is approximately 4 per 100,000, or less than a third of the rate of 50 years ago. Improvements in safety up to now have been the result of pressure for legislation to promote health and safety, the steadily increasing cost associated with accidents and injuries, and the professionalization of safety as an occupation. When the industrial sector began to grow in the United States, hazardous working conditions were commonplace. Following the Civil War, the seeds of the safety movement were sown in this country. Factory inspection was introduced in Massachusetts in 1867. In 1868 the first barrier safeguard was patented. In 1869 the Pennsylvania legislature passed a mine safety law requiring two exits from all mines. The Bureau of Labor Statistics (BLS) was established in 1869 to study industrial accidents and report pertinent information about hose accidents. The following decade saw little progress in the safety movement until 1877, when the Massachusetts legislature passed a law requiring safeguards for hazardous machinery. In 1877 the Employers' Liability Law was passed. In 1892, the first safety program was established in a steel plant in Illinois, in response to the explosion of a flywheel in that company.
After they have purchased a good or a service, consumers are protected by a series of assurances stated in the Consumer Guarantees Act. The Consumer Guarantees Act is designed to foster fair competition, and to protect the interests of consumers. The Act holds the supplier responsible for ensuring that the goods or services sold to consumers are reasonably safe and fit for purpose, and of satisfactory quality (New Zealand Legislation, 2013). Goods must be suitable for their usual function, safe to use, durable and must last for a reasonable time, have no minor defects, and acceptable in look and finish (Commerce Commission, 2014). Under this Act, suppliers must guarantee that the services are performed and completed with reasonable care and proficiency (New Zealand Legislation, 2013). Services must be carried out with sufficient precision fit for the specific purpose they were supplied for (Commerce Commission, 2014). They must also be completed within a reasonable time and provided at a reasonable price, if no time for completion, or price or pricing formula has been agreed beforehand. The Consumer Guarantees Act applies to all goods and services normally bought for personal or household use and consumption. Goods may include but are not limited to apparels, electronic equipment, kitchen appliances, and food. Services may be in the form of plumbing, repairs, accommodations, banking, and utilities such as gas, electricity, telephone, and water. The Act applies to goods and services sold on credit and goods hired out for use (Consumer Affairs, 2014). Also, Consumer Guarantees Act provides that consumers have certain rights of redress against suppliers and manufacturers if goods or services fail to comply with a guarantee. This mean...
Sullivan, A., & Steven M., (2003). Economics: Principles in action. Upper Saddle River, New Jersey : Pearson Prentice Hal