Federal And State Laws Regulate The Business Practices Of Large Companies

Federal And State Laws Regulate The Business Practices Of Large Companies

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Antitrust laws are a collection of federal and state laws that regulate the business practices of large companies in order to promote and protect fair competition within an open-market economy. These laws prevent businesses from taking part in unfair business activities such as, but not limited to, price fixing, market allocation, and bid rigging. Price fixing is when two or more competitors agree to each charge the same price for a product and not undercut each other. Market allocation is when competitors agree to divide markets among themselves, you stay out of my territory and I’ll stay out of yours. Bid rigging is when several businesses within a market agree to take turns winning and losing bids in order to maintain market control and prevent competition. As you can imagine, these unlawful business practices can have a very unfavourable effect on consumers. Antitrust laws protect consumers and sustain competition within markets, without these laws the U.S. economy would be quite different.

The origins of antitrust laws go all the way back to the 1800’s. Back then, there were several giant companies know as “trusts”. These companies controlled large sections of the U.S. economy, such as, oil, sugar, steel, and the railroad industry. These companies were monopolies that controlled the supply and price of their product. When one business controls an entire industry, there is no competition and consumers have no choice but to buy from the monopoly company at whatever price they set. Prices skyrocketed and since there was no competition, product quality decreased. This caused problems for consumers and threatened the existence of the new American prosperity. As the money-hungry monopoly 's continued to rake in money, consumers ...


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... Act by illegally maintaining the operating systems. Microsoft was also found to have established an illegal monopoly in the web browser market under Section 2. The judge further found that Microsoft violated Section 1 of the Sherman Act by requiring Internet Explorer be tied with Windows on PCs.

The findings supporting these decisions made it clear to the judge that Microsoft did have a monopoly in the PC operating system space, did take effort to protect its monopoly and stifle competition, and these repeated efforts were harmful to consumers and to overall competition in that market.

We as consumers have greatly benefited from the creation of antitrust laws. These laws have stimulated fair and equitable competition among competing businesses. This competition fuels innovation, ensures that consumers receive quality products and keeps the economy vibrant.

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