Question

What is your opinion regarding our antitrust laws?

should they even exist?If so,what should the threshold be?Size/structure alone?Or is a rule of reason more appropriate?

Answer 1

Antitrust Laws

The laws which are meant to protect the competition among business and market is called antitrust laws. This law is also meant to protect consumers satisfaction and prevent any kind of cheating with them. This law is practiced by several countries. In the U.S, this law was passed in 1890 by Congress as the Sherman Act " a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade". Federal trade commission (FTC) passed two more antitrust laws namely the Federal Trade Commission Act and Clayton Act in 1914. These laws are still in practice ofcourse with a little amendment in it. It promotes fair competition in an open economy and acts as a barrier for monopolization.

This law is helpful for the consumers as it restricts prices to not to become too high and also restrict market share. This is the reason that this law is a barrier to the monopolization of the market. It promotes healthy and fair competition in the market. This helps in increasing efficiency of the production in order to compete in the market among other producers thus the consumers are benefitted. This law also checks the price bidding, market share or market allocations, fixing of price, illegal mergers, etc. Therefore antitrust laws are beneficial for the society as a whole as it helps consumers and producers both. It also restricts bid-rigging which is illegal. Bid-rigging is to manipulate the prices in order to win the contract or tender.

The Federal trade commission act "bans the unfair methods of competition" and " unfair or deceptive acts or practices". Thus the court has declared that if the Sherman Act is overruled then it leads to the violation of FTC act also. The Clayton act covers the activities which have to restrain from the other two antitrust acts. Therefore, it is essential to have antitrust laws in the country. They should exist in the country to keep the competition fair, make sure that every producer follow laws and abide by it.