In the United States, the unexpected term "antitrust law" is used to refer to the body of the law related to harmful monopoly and / or prohibition of unfair business practices. Sometimes Competition law Antitrust law seeks to stop actions that promote competition in the business and may harm the interests of one or more commercial entities to the business community or consumers.
The Antimonopoly Act has been trying to prevent the formation of a serious corporate group in the second half of the nineteenth century. These entities called "trusts" were similar to today's cartels. In 1890, Congress passed the Sherman Anti-Monopoly Act, a groundbreaking law at the heart of the modern antitrust law.
Promotion of competition, prohibition of unfair practice
The Antimonopoly Act affects several areas of business management. For many people, they are known as laws prohibiting the formation of business monopolies, entities or alliance associations that are disproportionately managing the distribution and production of specific goods or services. This is partially correct, but you need to be aware that there is a distinction between monopolies. The Antimonopoly Act does not prohibit all monopolies, it prohibits only what is formed by illegal acts or unethical acts. Of the most common and unfair business practices prohibited by the US antitrust law,
Price agreement - an agreement to artificially determine the price of goods and services with competitors,
Territory fixed - Contract with competitors away from each other's geographic market area
Bid rigging - artificially designate a group of bidders to win the bid.
For example, a water company can technically (for existing pipe infrastructure) monopolize a given area, but its monopoly is not necessarily harmful to the economy and is likely to be tolerated. However, as a result of corruption under the Antimonopoly Act, a company like the infamous Standard Oil that traded with a railroad company to strengthen its competitors and strengthen the oil industry was divided into dozens of independent companies .
Enforcement of Antimonopoly Act
The two major institutions deal with the nation-level enforcement of the US Anti-Monopoly Act (DoJ) and the Federal Trade Commission (FTC). At the state level, the state attorney general may also file a civil lawsuit and enforce the Antimonopoly Act. Finally, private citizens are allowed to file suit against companies that feel violations of federal or state antitrust laws. The courts give incentives to civilians by tripling the damages actually given to consumers under antitrust law and encourage the enforcement of antitrust laws of private enterprises.
A controversial approach
Behind the Antimonopoly Act, the promotion price of enterprises has been lowered and the competition of high-quality products / services is intensifying. In short, competition is advantageous to consumers, monopolies are advantageous. This is somewhat controversial. Many economists allege that restrictive laws such as the Sherman Act do more harm than profits and may hinder the business from doing potentially valuable acts that seem contrary to law.
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For details of business laws in the United States and other related topics, please refer to the materials provided by Slater & Kennon (http://www.slaterandkennon.com) at the Austin business counter.
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