Antitrust refers to laws and regulations that are designed to promote competition and prevent monopolies or unfair business practices that might stifle competition. These laws are intended to protect consumers by ensuring that businesses operate in a fair and competitive environment.
In many countries, antitrust laws prohibit practices like price-fixing, market division, and monopolistic mergers and acquisitions that could harm consumer choice and lead to higher prices. In the United States, the primary antitrust laws include the Sherman Act, the Clayton Act, and the Federal Trade Commission (FTC) Act. Similar laws exist in other countries, often referred to as competition laws.
Key aspects of antitrust law include:
- Monopolization: Preventing a single company from dominating a market to the detriment of competition and consumers.
- Cartels and Collusion: Prohibiting agreements between businesses to fix prices, rig bids, or divide markets among themselves.
- Mergers and Acquisitions: Reviewing and potentially blocking mergers that would significantly reduce competition in a market.
- Price Discrimination: Preventing companies from charging different prices to different consumers in a way that harms competition.
Example Cases:
- The breakup of AT&T in 1982, which led to the creation of several smaller companies.
- The United States v. Microsoft Corp. case in the 1990s, where Microsoft was accused of maintaining a monopoly in the PC operating system market.
Antitrust laws are enforced by government agencies such as the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in the United States, as well as by similar bodies in other countries.
