...Antitrust law is the law of competition, and it is perhaps the least understood law of all. This article provides an overview and explanation of the essential principals of antitrust law, along with comments on certain recurring themes and recent developments in the voluminous case law by which the courts have struggled to give meaning and practical effect to the principal antitrust statutes. What Is Antitrust Law? Broadly speaking, antitrust laws seek to promote fair competition on the merits and to protect consumers and wronged competitor businesses from anti-competitive business practices — practices undertaken in effort to undermine competitive commercial behavior in a given market or line of commerce. The antitrust laws therefore forbid the wrongful acquisition or preservation of monopoly power, the abuse of monopoly power in order to establish a new monopoly, and concerted restraints of trade (i.e., business practices undertaken by two or more firms that improperly stifle or suppress “competition on the merits” in a given market). They also govern proposed mergers and acquisitions that are sufficiently large to constitute a threat to competition, and they address commercial practices that pose an arguable danger to competition on the merits in a properly defined antitrust market. The Principal Antitrust Offenses. Antitrust law is the law of competition. It is concerned with wrongs committed against competition on the merits in a given line of commerce or market. It is...
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...Antitrust Laws & Their Effects Jamar Averyhart Dr. Law Trine University In order to have a free economy you must have a competitive market place. A market that is open and stimulates the economy. This gives consumers whether they are organizations or just regular citizens the opportunity to purchase consumer goods at a relatively low price. As opposed to other economies that are not open markets, and that have one firm dominating the market place. Which drives up the price of consumer goods and make them unreasonably high. This is where antitrust laws come into play ("The Antitrust Laws," 2015). What are antitrust laws? Antitrust laws keep organizations from creating monopolies in industries, or colluding to drive up the price of items. If two major firms i.e. Apple and Microsoft were to merge. They control a large majority of the marketplace in the computer industry. This merger would lead to a shift in the price of computer and computer technology. It would create unequal competition and drive many other firms out of business. With the resources and consumer base that both companies have they would be able to dictate the prices in the industry and not have to rely on consumer demand and market trends. The first ever antitrust law was passed in 1890 which was the Sherman Act ("The Antitrust Laws," 2015). The Sherman Act made it illegal to try to form a monopoly, have a monopoly, or plan to have one. ("The Antitrust Laws," 2015) With the Sherman Act violating any...
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...Who Enforces the Antitrust Laws? The antitrust laws are enforced by both public and private parties. A. Government Enforcement The United States Department of Justice Antitrust Division (“DOJ”) and the Federal Trade Commission (“FTC”) share responsibility for investigation and litigation of cases under the Sherman Act; and, review potentially anticompetitive mergers under the Clayton Act. There is not a formal system by which the DOJ and the FTC divide enforcement responsibilities, the agencies devote resources to particular industries where they have investigated or litigated in the past. Typically the DOJ will review mergers in transportation industries, such as airlines or railroads, as well as the telecommunications industry. The FTC focuses its enforcement responsibility in the oil and gas, pharmaceutical, and health care industries. State attorneys general have authority to enforce federal and state antitrust laws. States investigating a matter arising under the federal antitrust laws will jointly investigate with either the DOJ or the FTC, or may conduct a separate investigation. Individuals or businesses that violate antitrust laws are subject to civil penalties that vary by state per violation for individuals, and vary by state per violation for corporations. In addition, state attorneys general have authority to seek restitution on behalf of the citizens of their states as a result of violations of either the federal or state antitrust laws. Some states allow Attorneys...
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...Antitrust Practices and Market Power Antitrust Practices and Market Power Content Introduction…………………………………………………………………………..Page 2 Case for Antitrust Behavior……………………………….……….…..…………….Page 2 Antitrust and Market Power…………..……………………………………………...Page 3 Benefit of Monopoly………………………………………………………….……...Page 4 Conclusion……………………………………………………………………….......Page 4 References………………………………………………………………………........Page 5 Antitrust Practices and Market Power Introduction First of all, what is antitrust? It was first introduced and advanced by the neoclassical economists. We also call the antitrust law as the "competition laws". The main purpose of developing the antitrust law is to ensure fair competition in an open market economy, thus protect the consumers and maximize social welfare. Case for Antitrust Behavior I consider the case of Microsoft as the perfect antitrust law case of the antitrust police. On May 18 1998, United States of Department of Justice initiated the lawsuit towards Microsoft Corporation. Microsoft was accused of becoming a monopoly and engaging in abusive practices contrary to the Sherman Antitrust Act 1890 sections 1 and 2. The accuser alleged that Microsoft was being monopolistic because its product Windows requires bundling IE, Intel, and MSO which are all it’s own products. In other words, people that wants to use Microsoft Windows has to buy all the sub-products in order to make the whole system run normally. The settle...
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...Executive Summary Over the years, Antitrust law has been instrumental in influencing healthcare. Whether we want to believe or not, antitrust law facilitated escorting medicine in as an establishment to take care of our communities and patients. Over the years, hospitals have been the brunt of antitrust litigation. Between 1985 and 1999 hospitals were defendants in 61 percent of 394 medical antitrust disputes that led courts to issue formal opinions (Hammer, Peter, J. and Sage, William, M., 2003). However, these numbers do not support the under published cases, which do not result in a judicial decision. When hospitals are healthcare conglomerates to provide services antitrust views them as just a business. The services provided by hospitals are complex from the services they provide to the technology they use to the human capital necessary to run the operations of the hospital. Unfortunately, antitrust law concentrates on the overall hospitals behavior and not its purpose. Therefore, not-for-profit designation and lifesaving intentions of the hospital consider immaterial to any type of analysis performed by antitrust. Hospitals reserve the right to enter into any joint venture agreement provided each entity is able to achieve its objects autonomous of one another and avoid becoming a dominate player in the market (Hammer and Sage, 2003). For the most part, it will be the market that dictates if the hospital meets the demands and services demanded by the community. The challenge...
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...Antitrust September 17, 2009 Tonight’s Agenda Role Call Review of Last Week, Current Events Antitrust Case Study: DeBeers Wrap Up Review of Last Week “People of the same trade seldom meet together, even for merriment and division, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” -- Adam Smith “Perfectly Competitive Market” Consumers well-served. Receive goods at lowest price possible. Society able to choose among competing good with maximum efficiency. Firms that do not produce what consumers want at a fair price are quickly eliminated. Highly restrictive model applying stringent standards. Antitrust Perfect competition model is essentially static. Real world markets are extremely dynamic. Perfect competition model is unsuitable as a benchmark. Antitrust Laws Promote a competitive economy by prohibiting actions that restrain, or are likely to restrain, competition and by restricting the forms of market structure that are allowable. Limit the activities of firms that have legally obtained monopoly power. Intended to provide a general statutory framework to give the Justice Department, the FTC, and the courts wide discretion in interpreting and applying them. The Development of Antitrust Laws Trust was a device for pyramiding control over several operating companies. The Sherman Antitrust Act (1890)...
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...BUSINESS LAW EVENT MEMO UWSP Business341 Section 1 To: Professor Steven Schinker From: Christopher Schroeder Date: February 20, 2013 Event Title: “Oversight of Google.” Senate Judiciary Committee – Antitrust, Competition Policy & Consumer Rights Subcommittee hearing. Witness: Eric Schmidt (Google CEO). Event Format: Webcast Event Length: 2 hours 53 minutes Related Text: Antitrust Law, pp. 938-939 The event is a webcast of the testimony of Eric Schmidt, CEO of Google, in a hearing before the Senate Judiciary Committee investigating company’s potential antitrust violations. Google has been accused of using its considerable search engine market share (about 65%) to give preferential ranking in search results and advertising to the company’s other products and services, over that of their competitors. Senators posed questions to Mr. Schmidt regarding Google’s methods of using their search engine to list their products higher than those of competitors. Mr. Schmidt denied using different algorithms in their search results in order to favor their own products. The issue relates to several issues covered in the text, mainly to the discussion of monopoly power. Section 2 of the Sherman Act prohibits the misuse of monopoly power to restrict trade in the marketplace when a firm possesses an extreme amount of market power (Clarkson et al. 939). Google indisputably does have extreme market power in the search engine market with 65%. Since Google obtained its market power fairly...
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...Business & Antitrust Laws Andrew Paul Danecki DeVry University Small Business & Antitrust Laws It may seem like in the United States that the free-market is a bit cutthroat and everyone is out for their own best interests. The U.S. is best described to have a mostly capitalist economy, and there are a handful of laws to allow growing businesses to have a fair chance to compete against other companies of the similar market. Antitrust laws, protection against monopoly, and laws pertaining to certain mergers are just to name a few. These laws are important, and extremely effective at protecting the small and growing businesses. It was not perfect at first, of course, but has adapted to cover a handful of loopholes. When you think of a monopoly, what normally comes to mind? That good, old classic board game made by Hasbro. That’s what I think of when that word comes in mind. And just like in the game, you try to dominate the board and be the only player left. The same goes for that word in the market world, which actually is illegal since the Sherman Antitrust Law was enacted in 1890. A monopoly is when a single company has solid control over the market with a particular product or service. Congress passed this first antitrust law as a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade” (The Antitrust Laws, n.d.). The last two laws were passed shortly later, and all three of these laws still remain...
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...Journal Topic: Monopoly and Antitrust The market power of either buyers or sellers, harms buyers who may have the opportunity to buy at competitive prices. It also reduces the production, which causes a deadweight loss. Excessive market power also raises issues of equity and justice, because if a company has too much monopoly power, it makes profit at the expense of consumers. A monopoly is a situation in which there is a single supplier or seller of a good or service for which there are no close substitutes. Economists and others have long known that unregulated monopolies tend to damage the economy by (1) charging higher prices, (2) providing inferior goods and services and (3) suppressing innovation, as compared with a competitive situation (i.e., the existence of numerous, competing suppliers of the good or service).[1] In theory, the Government or State could collect the excess profits that the company obtained through taxes and then redistribute it among the buyers of the product. However, this redistribution is usually not feasible. It is difficult to ascertain what proportion of the profits of an enterprise is attributable to monopoly power and it is even more difficult to locate all buyers and reimburse them an amount proportional to their purchases. How can society, then, limit the market power and prevent the anti-competitively use of it? In the case of a natural monopoly, i.e. an electricity/power company, the solution is...
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...Abstract The present paper is an analysis of the Antitrust law in Italy, and its relation with the conflict of interest. In this paper I have given a general introduction to the development of the Antitrust Law in the United States, and consequently in Europe and finally in Italy, and how it regulates the conflict of interest. It is mainly divided in three parts. The first part is an introduction, I have given a definition of what is a Trust, according to the Common Law, then I have explained how the corporate trusts were formed in America, and how and why the Antitrust Legislation was born, and how it has evolved. Therefore, I have discussed about the influence of the American Antitrust Law on the on the European Legislation covering this matter. In the second part, I have discussed about the Italian Antitrust Law, the monopoly of state and task of the Italian Competion Authority. In the third part, I have explained what is a conflict of interest and how the Italian Antitrust Law try to regulate it ( Frattini Law). At the conclusion I have mentioned some cases of conflict of interest in Italy, such as the one of the former Prime Minister Silvio Berlusconi, and how the former has not yet been solved. Keywords Trust, Antitrust Law Competition Authority Conflict of interest Frattini law Introduction Overview on the Antitrust Law in America and Europe The trust，definition Originally, a trust, in the Common law, is a relationship whereby property is held by one party for...
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...pieces of legislation collectively known as the Antitrust Laws. Antitrust laws were put in place to make business’s compete fairly. These fall into four main areas: agreements between competitors, contractual arrangements between sellers and buyers, the pursuit or maintenance of monopoly power, and mergers. The four major pieces of legislation collectively known as the Antitrust Laws are; the Sherman Antitrust Act, the Clayton Antitrust Act, the Federal Trade Commission Act and the Celler-Kefauver Act of 1950. The Sherman Antitrust Act has two categories that are targeted; ○ to restrain or prevent trade among states or foreign nations ○ prohibit against monopolies. ○ Only the United States Department of Justice has the power to prosecute individuals who are suspected of violating this act, (unless the individual state has the power granted by its own antitrust legislation.) The Federal Trade Commission Act ○ created the Federal Trade Commission ○ gave the Commission the power to enforce United States Antitrust legislation. The Clayton Antitrust Act ○ passed to prohibit mergers and acquisitions when those would substantially lessen competition. ○ enabled state attorney generals the ability to prosecute and enforce federal antitrust laws. ○ outlawed price discrimination, regulated stock acquisitions, and tying contracts ○ The Robinson - Pitman Act amended the Clayton Antitrust Act by banning discriminatory business practices...
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...1. Why was/were the firm(s) investigated for antitrust behavior? The Justice Department and the states believe that Microsoft has used its monopoly in operating system software to protect its dominance and eliminate competitors. The government says that in the long run, consumers will be harmed, because there will be less competition and fewer choices. More specifically, the government contends that Microsoft has engaged in actions to preserve its Windows monopoly that violate antitrust laws. The government also maintains that the company has used the power of its Windows monopoly to attempt to monopolize the market for Internet browsing software. In addition, government lawyers allege that the company has committed other anti-competitive acts. Microsoft contends that it is simply trying to innovate its products. The company contends that its actions are legal and says that there's no grounds of consumer indignation over the practices that the government is targeting. If the government wins at the trial court, it has already specified that it wants Microsoft to cancel contracts deemed exclusionary. In addition, the government wants Microsoft either to strip out its Internet browsing technology from Windows 98 or to include a rival browser made by Netscape Communications Corp. The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system sales and web browser sales. The issue central to the case was whether...
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...Antitrust , Monopoly and Oligopoly Introduction Prior to the United States Civil War the market was limited. After the war the market opened up into a more competitive market due to increased transportation and production abilities. Some large companies emerged leading to a monopoly market structure in which “one firm is the sole seller of a product or service” (McConnell, Brue, Flynn, 2012, p.164). When a monopoly market exists, companies have control over several key factors such as price, production, and distribution. A monopoly market creates high and difficult barriers for entry, preventing other companies from entering the market. Monopolistic companies “tend to produce less output and charge higher prices” (McConnell, Brue, Flynn, 2012, p. 375). To keep the market in competition, the United States government developed Antitrust Laws. What this law provide is a means of prevention of “monopolization, promote competition, and achieve allocated efficiency” (McConnell, Brue, Flynn, 2012, p.375). These Antitrust Laws are still being exercised today and one such example is Dean Foods. Antitrust The United States has Antitrust Division (DOJ) that monitors companies. In 2010, the DOJ brought suit against Dean Foods Company for violation of antitrust laws. Dean Food Company was in the process of acquiring Consumer Product Division of Foremost Farms USA. The suit alleged that this was a violation of the Clayton Act, an act that “sought to outlaw techniques that firms...
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... The federal government put together the antitrust laws as a way to make businesses compete fairly. These laws prevent monopolies, fixed pricing, they regulate trade and commerce and promote ethical production of products and services, at reasonable price points. The four major pieces of legislation that make up the antitrust laws are? The Sherman Antitrust Act, The Clayton Antitrust Act, the Celler-Kefauver Act of 1950, and the Federal Trade commission act. The Sherman Antitrust Act focuses on restraint and prevention of trade between foreign nations, prohibition of monopolies, and is the only US department of Justice that has the power to prosecute people that are in violation of this act. The Clayton Antitrust Act was passed to prohibit acquisitions and mergers that would lessen competition between companies, enabled state attorney generals the ability to prosecute and enforce federal antitrust laws. It also outlawed price discrimination, regulated stock acquisitions and tying contracts. The Clayton Antitrust Act was amended by The Robinson-Pitman Act that banned discriminatory business practices. The Celler Kefauver Act of 1950 was passed to regulate the acquisition of firms that were not in direct competition and limited mergers that would lessen competition in the market place. The Federal Trade Commission Act created the actual Federal Trade Commission and gave the commission the power to enforce US Antitrust legislation. B. The intended purpose of...
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...Antitrust Laws After much research and investigations on Antitrust Laws, and reading up on individual cases, I think that overall Antitrust Laws are effective and good for the people. Without the Sherman, Clayton, and Federal Trade Commission Act, there would be a monopoly of every industry, trade, marketing, and services. This would in-turn lead to higher prices for the consumer, lower quality products, less innovation, and poor service. As I mentioned in my opening sentence, I will bring up two individual cases that the DOJ (Department of Justice) is pursuing when it comes to Antitrust Laws. I would like to begin by quoting the DOJ’s mission statement. Mission “The mission of the Antitrust Division is to promote economic competition through enforcing and providing guidance on antitrust laws and principles. Antitrust Laws The goal of the antitrust laws is to protect economic freedom and opportunity by promoting free and fair competition in the marketplace. Competition in a free market benefits American consumers through lower prices, better quality and greater choice. Competition provides businesses the opportunity to compete on price and quality, in an open market and on a level playing field, unhampered by anticompetitive restraints. Competition also tests and hardens American companies at home, the better to succeed abroad. Federal antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution...
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