Antitrust laws, also referred to as competition laws, are statutes developed by the U.S. government to protect consumers from predatory business practices.
Antitrust laws ensure that fair competition exists in an open-market economy. These laws have evolved along with the market, vigilantly guarding against would-be monopolies and disruptions to the productive ebb and flow of competition.
Antitrust laws help make sure the different businesses in a marketplace are operating on a level playing field. Some companies use unfair or deceptive practices in order to get a larger share of the market. If antitrust laws did not exist, consumers would not benefit from different options or competition in the marketplace.
Antitrust laws are applied to a wide range of questionable business activities, including market allocation, bid rigging, price fixing, and monopolies. Core U.S. antitrust law was created by three pieces of legislation: the Sherman Anti-Trust Act of 1890, the Federal Trade Commission Act, and the Clayton Antitrust Act. The Sherman Anti-Trust Act intended to prevent unreasonable “contract, combination or conspiracy in restraint of trade.” The Federal Trade Commission Act bans “unfair methods of competition” and “unfair or deceptive acts or practices.” The Clayton Antitrust Act addresses specific practices that the Sherman Anti-Trust Act may not address. According to the FTC, these include preventing mergers and acquisitions that may “substantially lessen competition or tend to create a monopoly.” In addition to these federal statutes, most states have antitrust laws that are enforced by state attorneys general or private plaintiffs. Many of these statutes are based on the federal antitrust laws.
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