In the world of the many competitions and constantly changing economies it is not very easy to run the business fairly and to get profit from that. Due to constant economic instability in the world, it is an important task of the government to issue a number of legal laws that would support entrepreneurs and to encourage competitive business practice. Many businesses try to do their bets to be at the winning positions of the competition edge and they must all be aware and understand any types of laws that can help them to work fairly, transparently and effectively. The most common example is the antitrust laws that are targeted to restrain commerce and trade that might be held illegally in the market of any size (SBA.gov, 2014). Thereafter, the objective of the following paper is to review some of the laws that are intended to enforce the fair, legal and competitive business practices.
Competition is beneficial for business and consumers as this mainly results are lower prices, more choices, higher quality of services and products and further focus on innovations. The governmental organization, known as Federal Trade Commission, was intentionally created in order to enforce the antitrust laws as this would protect consumers and promote vigorous competition. The official website of this organization contains a "Guide to the Antitrust Laws" that is intended to provide deeper explanation of the antitrust laws (Federal Trade Commission, 2014).
The first antitrust law was passed in 1890 and is known as a Sherman Act. It states that any combination that can result in the form of conspiracy "is declared to be illegal" (The Sherman Antitrust Act, 1890). The congress called it "comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade" (Federal Trade Commission, 2014). From the historic prospective, there was a decision made by the Supreme Court that stated that the prohibition enforced by the Act was related only to unreasonable type of trade. This is related to the situation where some individuals have made a decision to form a partnership restrains trade, which was not done with the intention to make in an unreasonable practice. These types of cases fall under the lawful requirements of the antitrust laws. Thus, other types of acts are seen as a very harmful and usually are announced as illegal. These might be plain agreements related to market divisions, rig bids or fixed prices. The penalties for these Act violations are severe and might end up with the prosecution by the Department of Justice.
Other major antitrust laws are the Federal Trade Commission Act that was issues in 1914 and the Clayton Act issued on the same year. The mission of the first Act is to combat the "unfair or deceptive acts or practices" (Federal Trade Commission Act). It includes all the violations mentioned in the previous Act and reaches other types of harm competitions and practices, which might not have been brought under Sherman Act. The Clayton Act was issued to address the specific details and practices under the Sherman Act as well, as it has not all cases specified, such as interlocking directorates and mergers. Such acquisitions and mergers that have an impact that "may be substantially to lessen competition or to tend to create a monopoly" are prohibited (Federal Trade Commission, 2014).
There has been much discussion whether these laws are effective. Yes, they are effective, as they have helped to avert many of the acquisitions, mergers and other deals that would not be beneficial for the consumers, but there are certain pitfalls. As the economic circumstances are far different from those that have been in 1912, the acts related to antimonopoly have evolved with time. The only thing that has not changed was the main purpose of those laws, which is about protecting the right of consumers more than the owners of the business. Some experts might claim that there has been a major error that occurred, as such huge corporations as Google, Microsoft and others seem to be having a dominant market share for ages. Thus, Microsoft has really been fighting hard with the antitrust organizations and laws in order to be in the place it is now, as it has won it by hard work and constant implementation of innovations. This caused the public to look into the effectiveness of the antitrust laws in terms of going after competitive technology markets. The first conclusion can be made that antitrust laws are effective as they target only those monopolies, which are not beneficial for consumers. The mentioned Acts are also beneficial as long as they do not created additional problems for other financial companies while entering the market (Humphries, 2012).
Unfortunately, it is also important to mention that antitrust laws have a negative impact at the international activities of the U.S. businesses. The international operations have been hurt and there are some certain distinguished areas, where the impact is the biggest. The claims made by the antitrust regulatory offices are related to the licensing agreements, foreign sovereign compulsion doctrine usage, antitrust enforcement multifaceted nature and others (Schwechter, Schepard, 2014).
Thereafter, the main objective of the following paper has been achieved, as it clearly states that the government has issues a range of laws that help the businesses to be run fairly and have balanced competition. Thus, the laws that are discussed in the following paper have and ambiguous nature, as they are effective and help the consumers to get the best price and quality on the market, while might hurt the business owners.
- SBA.gov. (2014). Understanding Fair Practice. SBA.gov. Retrieved from http://www.sba.gov/content/understanding-fair-practice
- Federal Trade Commission (2014). Guide to Antitrust Laws. Federal Trade Commission. Retrieved from http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws
- Federal Trade Commission (2014). The Antitrust Laws. Federal Trade Commission. Retrieved from http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws
- The Sherman Antitrust Act (1890). The Sherman Antitrust Act. Retrieved from http://www.linfo.org/sherman_txt.html
- Federal Trade Commission Act (n.d.). Federal Trade Commission Act. Section 5: Unfair or Deceptive Acts or Practices. Federal Trade Commission Act. Retrieved from http://www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf
- Humphries, L. (2012). How Monopoly Antitrust Laws Affect Consumers. Investopedia.com. Retrieved from http://www.investopedia.com/financial-edge/1012/why-monopolies-can-be-positive-for-the-consumer.aspx
- Schwechter, M., Schepard, R. (1979). The Effects of United States Antitrust Laws on the International Operations of American Firms. JILB Vol. 1 Iss. 2 (1979). Retrieved from http://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?article=1060 context=njilb