UpCounsel accepts only the top 5 percent of lawyers to its site. If you need help with legal matters, you can post your legal need on UpCounsel's marketplace. Along with lower prices, the diversity of products and services offers consumers a variety of options. When one company isn't allowed to control the market in a monopoly, the public can shop and compare. In 1954, this was deemed a violation of the Sherman Act for product “tying.” Kodak was then required to license the film processing to third-party vendors.Īntitrust laws give American consumers a number of benefits. The company started including a fee in the pricing structure for processing and delivery. It developed Kodacolor instead, and only Kodak could develop it. In 1921, the company was no longer allowed to sell private-label film under its label. Kodak won several antitrust lawsuits, but a couple of them led to stronger laws. At one point, the company controlled almost the entire camera and film market in America with a 96 percent share. The division of Kodak is another example. Today, only three are left: AT&T, Qwest, and Verizon. As a result, the company was divided into seven separate regional companies. It took seven years before a verdict was reached. However, the Attorney General filed an antitrust lawsuit against the company in 1974. There are slight differences in this example because AT&T was permitted to work as a natural monopoly for many years. Repercussions are still being felt from the forced breakup of AT&T. The company lost nearly $70 billion in market value as a result. Consumers had choices in what to purchase, but Microsoft was still found guilty of violating anti-competition laws. In this example, however, other market options existed, such as Apple. When the tech company began bundling products such as Windows and Explorer, they ran afoul of the law. The Microsoft case is another famous example. When brought to trial, Standard Oil owned 64 percent of the market with 147 other competitors sharing the rest. The company bought up several refineries that weren't able to compete. As its control of the market increased, the company lowered production costs and prices even more while still making bigger profits. The company dropped prices by more than 50 percent and bought up several of its competitors. Rockefeller's Standard Oil is one of the most well-known antitrust law examples. Its purpose is to protect small businesses by limiting the ability of big companies to use their purchasing power to command discriminatory discounts. The Robinson-Patman Act of 1936 governs price discrimination. This act protects healthy competition in the interstate commerce field. The act essentially gives the government the power to challenge large-scale moves by corporations, so it also creates a barrier against monopoly creation.Īnother civil statute is the Federal Trade Commission Act, passed in 1914. The Clayton Act is a civil statute designed to protect competition and prevent skyrocketing prices due to certain business practices, acquisitions, and mergers. This act prohibits contracts and conspiracies that hurt competition in order to form a monopoly. This is the main law regarding free market competition. In 1890, the Sherman Antitrust Act was passed. Violations of antitrust laws are viewed as white-collar crimes since they: Companies must provide higher quality products or charge lower prices in a competitive market if they want to be successful. When competition exists among sellers, consumers benefit from lower prices, more choices, better quality, and greater innovation. Corporate mergers that have the potential to reduce competition in particular markets.Predatory acts to achieve and maintain a monopoly.The types of illegal practices that antitrust laws target include the following: The laws prohibit several practices that restrain trade, and they're necessary for a free and open marketplace. Antitrust laws govern transportation, manufacturing, marketing, and distribution. The laws are designed to protect competition. What Is Antitrust?Īntitrust laws are statues that apply to nearly all industries and levels of business. Businesses must observe all antitrust laws as they relate to their commercial activities. In addition, each state has antitrust laws that complement federal laws. Federal antitrust laws examples include the following:
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