...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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...18. May 2012 Final 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...
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...Google Antitrust Investigation Google is an American corporation specializing in internet search. Google was founded by Larry Page and Sergey Brin while they were doctoral students at Stanford University in the mid 1990's. The company has been estimated to run more than one million servers in data centers around the world and process over one billion search request each day. The company's perceived monopoly and market dominance let to media coverage accusing the internet giant of not only copyright issues, but censorship and privacy violations as well. However, despite these accusations, Google.com was reportedly the most visited website in 2013 (Savitz & Cooper, 2012). Google's critics claim that it unfairly utilizes its search engine to advance its own services over their competitors. Companies with no ties or google affiliations claim that, “Google engages in anti-competitive behavior across many vertical categories of search that harms consumers by restricting the ability of other companies to compete or put the best products in front of Internet users, who should be allowed to pick winners and losers online, not Google” (Savitz & Cooper, 2012). Google has fired back to these allegations by claiming that search users are easily able to locate other service providers and that their website is built for users and not for websites. Ironically, Microsoft was the company who originally launched the initial claims regarding Googles online practices. Many people remember...
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...| ANTITRUST LAW | | Name -Manpreet Kaur [Date] | “The mission of the Antitrust Division is to promote economic competition through enforcing and providing guidance on antitrust laws and principles”. Antitrust laws have been developed to create the strong foundation of a free & open market of a vibrant economy. Market is so competitive now a days, there are so many options available for products & services, which is the result of antitrust laws. Antitrust is developed to help both consumers & business owners. “These laws promote vigorous competition and protect consumers from anticompetitive mergers and business practices” Antitrust laws are developed by the U.S. Government, also commonly known as "competition laws". Antitrust law was put in place by U.S. Government to protect consumers from being vulnerable to exploitery business practices. Government protects consumers by ensuring that the competition which exists in the market is fair, & would also ensure that enforcement leads to an open-market which is consumer friendly. ANTITRUST LAW-GOAL & HISTORY The goal set by government is to protect the end user, consumer, antitrust laws “is to protect economic freedom and opportunity by promoting free and fair competition in the marketplace”. Consider being in a market with one option, what it would offer to consumers, technically nothing, because there are no options. Antitrust law ensure that the “Competition in a free market benefits American...
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...The Microsoft Antitrust Case* by Nicholas Economides** Revised April 2, 2001 Abstract This paper analyzes the law and economics of United States v. Microsoft, a landmark case of antitrust intervention in network industries. The United States Department of Justice and 19 States sued Microsoft alleging (i) that it monopolized the market for operating systems of personal computers and took anti-competitive actions to illegally maintain its monopoly; (ii) that it attempted to monopolize the market for Internet browsers because such browsers would create competition for operating systems; (iii) that it bundled its browser (Internet Explorer) with Windows; and that it engaged in a number of other anti-competitive exclusionary arrangements with computer manufacturers, Internet service providers, and content providers attempting to thwart the distribution of Netscape’s browser. The District Court Judge found in most points for the plaintiffs and ordered the breakup of Microsoft into two companies, one with all the operating systems software, and one with all other products of the company. The District Court also imposed a number of severe restrictions on the business conduct of Microsoft. We analyze the economic issues related to liability. We also analyze the applicability and effectiveness of the remedies imposed by the District Court and contrast them with other potential remedies. * Forthcoming in Journal of Industry, Competition and Trade: From Theory to Policy (August 2001)...
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...Principles of Economics Antitrust Practices By: Bryan Williams July 25, 2013 In this case I think Dell was a little selfish and thought they could get credit for all of the work done! In this article they are talking about a patent that was not approved which Dell implemented but later was enforced against various VL-bus manufacturers. The mechanism transfers instructions between a computer's central processing unit and its peripheral devices. In the article it states that the patent was a violation. Due to all parties being members of the Video Electronics Standards Association (VESA) they had their fair share of credit in the development of this mechanism. In the next case a patent was placed by the plaintiff and the defendant ignored the law and now is being sued for violation. Personally I don’t understand why the law couldn’t be abided by and I can understand that the law had to be enforced. The defendant eventually filed a counterclaim for alleged improper conduct on the plaintiff. It’s rightfully so because it seems as if the plaintiff was trying to be sneaky in their attempts to put a patent in place. The case was investigated under the Sherman Act and said the plaintiff had denied access to its technology. In the end the courts refused the defendants counterclaim and said that the plaintiff’s actions did not cause alleged injury to competition. I’m sure if the plaintiff had come to the defendant on different terms they could’ve come to a decision that would’ve...
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...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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...Running Head: PROTECTION FOR THE CONSUMER IN ANTITRUST LAWS Student Date Abstract There are instances where major manufacturers are protected by antitrust laws. Even though it may appear they are siding with a monopolistic power in the marketplace. On the other hand federal regulation commissions are hard at work in protecting the consumer from unfair treatment. The judgment under which such decisions are made require careful consideration of the intent of the companies involved and how they affect the consumer. Why would the drug maker want to stymie generic competition? Explain. One of the main reasons that a major pharmaceutical company would attempt to stymie generic competition is of course loss of revenues. The generic brand often times provides the same level of benefits but at a much lower costs, therefore the drug maker would lose million of dollar potentially by allowing the generic product equal opportunity. Another reason is that the cost of developing a drug, in addition to advertising and marketing the product oftentimes requires thousands of dollars be invested. In order to recoup the cost of research and design, manufacturing, compliance to federal regulations and the like, it is necessary for the product to be successful. Any competition will hinder potential success of the product. Consider the fact that companies must be successful to continue to have investors willing to resource projects, studies, and funding for research and development...
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...operating systems ("OSs") and by unlawfully attempting to monopolize the market for internet browsers, and that it had violated Section 1 by illegally tying its Windows operating system and its Internet Explorer ("IE") browser. The court ordered Microsoft to submit a plan of divestiture that would split the company into an OS business and an applications business, and ordered interim conduct restrictions. Microsoft, 253 F.3d at 45.” (Weil & McMillan, 2003). The Sherman Antitrust Act prohibits agreements, contracts, combinations, and conspiracies that result in inhibiting or restraining free trade. The act is very broad and can include relationships or agreements that result in price fixing. The Act attempts to either prevent monopolies or break up a monopoly that has been created. Antitrust statutes can be enforced by the federal government through the U.S. Attorney, Federal Trade Commission, through the attorney general of each state, or by individual action. The antitrust provisions of the Sherman Antitrust Act have been used against the railroad industry, the major oil companies, telecommunications, and more recently companies in the high tech industry such as Microsoft. (Mallor, et. al., 2010). Issues: Did Microsoft maintain a monopoly for their product (PC OS system) in violation of the Sherman Act Section 2? Did Microsoft attempt to create a monopoly for their IE browser in violation of Section 2? Did Microsoft illegally tie together two separate products, IE and Microsoft...
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...individuals, seeing the success of this industry, would try to enter the market in order to compete. This idea is the very basis of free market and capitalist economies. But sometimes there are situations where an individual will have a product or service that is better, cheaper, or quicker than everyone else; so much so that they are the only ones that can effectively provide it. When this occurs, competing businesses and giant government entities will stop at nothing to shut it down. The Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act make up the current US antitrust laws. The antitrust laws are supposed to promote and protect competition. The philosophy behind the laws is that trusts and monopolies will stagnate markets and prevent others from engaging in healthy market competition. A monopoly is defined as a situation in which a single company owns all or nearly all of the market for a given type of product or service. (Investorwords, 2010) Antitrust law legislation started with the Sherman Act that was passed in 1890. The intent of the law was put in place to challenge the unchecked growth of corporations. By 1888, large corporations gained enough market muscle to dominate entire industries. The Sherman Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate trade. This includes agreements among competitors to fix prices, rig bids and allocate consumers. The Act also makes it a crime to monopolize any...
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...Small 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...
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...Antitrust Practices and Market Power | DeVry University | Eva Wise | Antitrust Policy consists of laws and government actions designed to prevent monopoly and promote competition. On June 23, 2011, the U.S. Federal Trade Commission initiated an antitrust probe into Google, the world’s largest search engine. FTC’s investigation entailed a broad probe into Google’s business practices and weather it was abusing its search power to drive traffic to its own properties over rival sites and services. After a nearly twenty month high-profile investigation, the federal government announced on January 3, 2013, that its dropping an “exhaustive” probe into Google as it found no evidence the company was abusing its search power. Google was investigated under violating the Sherman antitrust act. “The definitive antitrust statute, passed by Congress in 1890, that prohibits monopolies or unreasonable combinations of companies to restrict or in any way control interstate commerce. Specifically outlawed is two or more persons engaging in monopolistic practices, such as price fixing, although it does not outlaw price-fixing per se. It was amended in 1914 by the Clayton Act, which outlaws interlocking directorates and deals with acquisitions that aim to restrain or eliminate competition. (Your Dictionary Law)” “For example, one element of a duty-to-deal claim under the Sherman Act is proving that Google’s treatment of rival websites harms consumers; even the cleverest economist would be...
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...Market Power The Congress passed antitrust laws in effort to protect competition in the market, as well as consumers whom are the ultimate recipients in the market (Novak, 2007). The case that will be discussed in this paper will be a company that was found guilty of violating section 2 of the Sherman Act, which focuses on people that are trying to monopolize the market for their own benefit, or someone that is trying to get complete control within an area of the economy. With the Sherman Antitrust Act in place, monopolization is very illegal and the act tries to prevent it from happening and protect competitors in the market (Novak, 2007). Dentsply International is a company that makes dental products, but their main product sold is false teeth. The company sells product in over 100 countries, so it is a very large company. The company sells its products to dealers, who then sell the false teeth and other products to dental labs. These labs then distribute the product to dentists with the supplies they need. If you don't include false teeth, the company supplies buyers with millions of dollars of products and dominated the artificial teeth market since they had close to 80 percent of the market share at the time they were being sued (Novak, 2007). Dentsply told their dealers that they had tell sell their supplies and deal primarily with them. When the Dentsply did that, it made many dealers unhappy, and was the reason for the antitrust action the government brought against...
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...This is where antitrust laws come into play. The three core federal antitrust laws include the Sherman Act (1890), the Federal Trade Commission Act (1914), and the Clayton Act (1914). These three laws were put into place in order to attempt to prevent businesses from having an unfair monopoly in different markets (Blue, 2004).The Federal Trade Commission’s purpose is to promote free and open markets, which provide consumers with several benefits. These benefits include lower prices, higher quality products, because the companies are always competing with each other, greater innovation, and more products and services to choose from (www.ftc.gov). Obviously these acts were put into place long before the Internet was even conceivable, but the same principles can be applied to the Internet markets. Some think that the antitrust laws are enough to regulate the online marketplace, but others feel that more regulations need to be put in place. Virginia State Rep. Bob Goodlatte stated in 2014 that net neutrality regulation usually stifles innovation instead of stimulating it. If there is no innovation, there is no advancement as a society. He goes on to explain that antitrust law prosecutes on a case by case basis while new regulations do not, which can ultimately affect consumers (Goodlatte,...
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...The Department of Justice has begun looking into whether large U.S. telecommunications companies such as AT&T Inc. and Verizon Communications Inc. are abusing the market power they have amassed in recent years, according to people familiar with the matter. The review, while in its early stages, is an indication of the Obama administration's aggressive stance on antitrust enforcement. The Justice Department's antitrust chief, Christine Varney, has said she wants to reassert the government's role in policing monopolistic and anticompetitive practices by powerful companies. Christine Varney testifies at a Senate Judiciary Committee confirmation hearing in March. ENLARGE Christine Varney testifies at a Senate Judiciary Committee confirmation hearing in March. Bloomberg News The law that covers such behavior, the Sherman Antitrust Act, has been used in the past against giants ranging from Standard Oil to Microsoft Corp. It lay essentially dormant during the Bush years, with the agency bringing no major case. The telecom industry is among several sectors now coming under scrutiny. Others include health care and agriculture. The Justice Department is already cracking down on certain agreements. It recently filed an objection to plans by airlines in the global Star Alliance to cooperate more closely on international routes and fares. It has targeted payments large pharmaceutical producers sometimes make to generic-drug makers to delay cheap copies of medicines. In addition...
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