Question

1. Please name six industries or businesses that are EXEMPT from antitrust legislation. In your opinion, why is it that labor unions are exempt? Professional baseball? Public utilities, like PG&E? Shouldn’t PG&E be MORE heavily regulated? Why or why not? Are there sound public policy reasons for these exemptions, and if so, what are they? Or is it all just a matter of these industries and businesses wielding enough political power to obtain an exemption?

Answer 1

Solution:

Antitrust Laws promote a level playing field due to which consumers gain through lower prices and better products. In a free market, companies will compete against each other by providing products of better quality at lower prices.

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However, few industries are exempt from the Antitrust Laws examples of which are as follows:

1. Professional Sports - Leagues such as Baseball, Hockey, Basketball, and Football are exempt from Antitrust Laws. Even though teams travel across states for games, there is no evidence of commerce taking place between the states.
2. Labor Unions - Antitrust Laws do not apply to employees while forming or participating in Labor Unions. As per laws, human labor is not a commodity. The purpose of the exemption was to provide equal bargaining power to all employees.
3. Public Utilities - They are exempt from Antitrust Laws because too many players in the same region can make business non-viable. Though utility companies are exempt from Antitrust Laws, they are subject to regulations under State and Federal commissions, such as CPUC and FERC.
4. Insurance companies - Insurance companies enjoy partial exemptions under Antitrust Laws as mentioned under the M-F Act of 1945.
5. M & A Transactions in the Defence Sector - Defence is a strategic sector for protecting national interest where the focus is on specialisation, quality and technological advancement. Thus, they are exempt from Antitrust Laws.
6. Media - Certain newspapers are allowed partial immunity from Antitrust Laws under the NP Act of 1970. The premise of this exemption is that Antitrust Laws should not encroach into Media and free-speech.

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The premise of the Antitrust exemptions ranges from the absence of commercial interest, to protect the national interest, to allowing free-speech and ensuring equal bargaining power. Most of these exemptions are based on specific Acts and Laws. One can assume that some amount of power or clout is required to get these laws enacted. However, it is also true that all Laws have sound and strong premise in line with the US constitution.