The Benefits Of Antitrust Law

The Federal Trade Commission(FTC) was created in 1914. It was created to ensure that there were no businesses that were anticompetitive; meaning that there wasn’t one company or business that was creating a monopoly. The FTC has three main goals; they are to protect consumers, maintain competition, and advance performance. They protect the consumers by preventing fraud and making sure businesses are fair in the marketplace. They maintain competition by preventing companies from merging together and creating a monopoly. Finally, they advance performance by advancing the FTC’s performance through organizational, personal, and management excellence. The FTC is very beneficial, and although not everybody knows about it, as a consumer it helps with the economy of every American. Throughout the years since it was created, there has been more laws added that help keep businesses

Last February, the Supreme Court issued its opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission (Dental Examiners). The case concerned the Board’s decision to stop teeth whitening services by non-dentists in the state. The Federal Trade Commission alleged that the Board had violated antitrust laws by attempting to limit competition by its teeth whitening decision. State entities such as the Board generally were thought to have immunity from antitrust laws, but the Supreme Court’s decision reversed this long-held belief and found that state boards could be held liability if certain conditions were met. The major condition was that the board be made up of a majority of active market

In Document 4 “A Call to Action,” by James B. Weaver, it explained to the public through the author's thoughts of that monopolies had too much power and that the monopolies destroy competition and trade. This book was written at the time of when big corporations were taking over and destroying competition. Also, the author goes into detail that they control the price of the raw material, so they can produce their products at a low price and sell it at a low price. By selling that the lowest price, the competitors can not compete are driven out of business or reduce the wages of the workers. This idea can be related to current times were big corporations, such as Walmart, are destroying competition because they lower their prices that the competitors cannot compete with.

In the United States, The FTC (federal Trade Commission) has the authority to impose penalty against advertisers whom violate Federal Standards for truthful advertising. The FTC considers a message to be deceptive, if they include statements that are likely to mislead reasonable customers and the statements that are likely to mislead reasonable customers and the statements are an important part of purchasing decision. A failure to include important information are also considered deceptive. Also, the FTC also looks at so-called “implied claims,?” Claims that you don’t explicitly make but that can be inferred from what you do or don’t say.

Unknowingly, Antitrust began a cycle of Rule of Reason, which is the Lax Enforcement, and the Per Se Rule, which is the tight enforcement (Boyes 2013, p 249). Litigation of the Antirust law was not frequent, and that’s because between the years of passage 1890 and 1914, only seven cases were tried by the Supreme Court, in which they broke up monopolized companies like Northern Securities, and Standard Oil Co. of New Jersey; but also allowed the formation of major league baseball. This period of Lax Enforcement ended with the passage of the Clayton Antitrust Act and the Federal Trade Commission Act, and ushered in Per Se Rule. The changes to Antitrust laws gave a more clear definition to the law by guide lining the prohibitions of price discrimination, the creations of barriers to enter a market, outlaws mergers deemed unfair, and imbalanced methods of business; the Federal Trade Commission was also allowed to investigate into these practices. Since 1941, the FTC and it parent division, the Justice Department, had filed over 2,800 cases related to Antitrust, but it is the private sector that had an exponential amount lawsuits filed. Between the passage of these two laws and the Supreme Court Justice William Douglas, who prized the laws, any inkling of proof that a business could be monopolizing or engaging in unfair business practices, almost always lead to a guilty verdict that mostly results in a heavy fine, and in extreme

Laws and Regulations are not easily defined when antitrust laws are violates. There are many versions and analysis which often leads to agree to disagree. With public support, antitrust laws can be enforced and effective but with ignorance and indifference, it can become weak.

Through the application of the “Rule of Reason”, a methodology used by courts to interpret US antitrust laws and analyze relevant

In all three degrees of price discrimination firms are able to make more profit and eliminate any excess capacity they may have. Firms are able to do this by charging higher prices to those consumers with a more price inelastic demand for their product. The firm is reducing the welfare of these consumers by changing them at the maximum price they are willing to

The first antitrust law passed by Congress was the Sherman Act, in 1890. In 1914, Congress passed two other antitrust laws: The Federal Trade Commission Act, which created the Federal Trade Commission, and the Clayton Act. With some revisions, these are the most important federal antitrust laws still in effect today. Section 7 of the Clayton Act prohibits mergers and acquisitions when the effect "may be substantially to lessen competition, or to tend to create a monopoly." (ftc.gov) The antitrust laws proscribe unlawful mergers and business practices in general terms, leaving courts to decide which ones are illegal based on the facts of each case. For over 100 years, the antitrust laws have had the same basic objective: to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up. The enforcement authorities of the federal antitrust laws are The Federal Trade Commission and the U.S. Department of Justice (DOJ) Antitrust Division (ftc.gov).

Price fixing and exclusive dealings are harmful for consumers and small businesses trying to compete with large businesses. The issues with price fixing is that the consumers have to buy an item for a certain price. There is no supply and demand, along with the fact that the prices can fluctuate without any certain pattern. As the prices become higher, the company get

Antitrust law in the United States is a collection of federal and state government laws regulating the conduct and organization of business corporations with the intent to promote fair competition in an open-market economy for the benefit of the public. Congress passed the first antitrust statute, the Sherman Antitrust Act, in 1890 in response to the public outrage toward big business. In 1914, Congress passed two additional antitrust laws: the Federal Trade Commission Act and the Clayton Act. (The Antitrust Laws. Web.)

Section 1 of the Sherman Antitrust Act, in part, states that “every contract, combination… or conspiracy, in the restraint of trade or commerce… is declared to be illegal.” (Sherman Act, 2006). This law provides “a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade (Northern Pacific Railway Company vs. United States, 1958; Reiter vs. Sonotone Corporation, 1979). It relies on a fundamental belief in supply and demand (Baum Research & Development Company vs. Hillerich & Bradsby, 1998).

This chapter sets out the rationale for price discrimination and discusses the two major forms of price discrimination. It then considers the welfare effects and antitrust implications of price discrimination.

pricing closely, as being out of step with the market can cause dramatic market share changes in a

In a perfectly competitive market each firm is a “Price Taker” , i.e. the prices and wages are determined by the market and the firm is so small relative to the size of the market that they can have no influence over the market price. For a market to be