Antitrust Laws in Usa - Research Paper

The United States has many laws in place in order to keep business practices fair, balanced and competitive. The roles that these laws play are kept in place, so that consumers have the benefit of competitive prices, while still getting high quality goods and services. Competition can help stimulate the economy, “Competition has a positive impact, not only on the wellbeing of consumers, but also on a country's economy as a whole. Competition bolsters the productivity and international competitiveness of the business sector and promotes dynamic markets and economic growth” (Kolasky). Antitrust laws are effective because it prevents businesses from monopolizing and facilitates competition.

Antitrust laws apply to virtually all industries and levels of businesses.  The advantage of this is that it allows promotion of competition while keeping certain limits on companies and it doesn’t apply to just a specific type of business, it essentially doesn’t discriminate or favor any one business over another. By doing so, will help prevent companies from things such as mergers that would reduce the number of competitors or acts that would keep a company from becoming a monopoly, “exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices” (Monopoly). Which keep a business having total control over a certain aspect of materials or products offered to consumers. A monopoly is bad for consumers because it is essentially the elimination of competition for a particular type of business.

The goals of antitrust laws are to protect competitors and consumers by keeping major companies from completely taking over industries. “The antitrust laws accomplish these goals by promoting and fostering competition in the marketplace and preventing anticompetitive mergers and business practices” (Guide).  By doing so, businesses can set their prices based off of competitor prices to help increase sales of goods and services offered for their consumers. Since the laws were put into place by the government, they are also able to be sure that not only does it benefit large companies and consumers, but also helps local and small businesses. Competition acts almost as a sort of filer. Competitive companies thrive, they are successful. Companies that aren’t as competitive fail or companies that just never seem to thrive and grown, are doomed for failure. Competition encourages manufacturers and service providers to be more efficient and better respond to the needs of their customers.  The Clayton Antitrust Act of 1914 outlaws the following actions in reference to businesses:

1. “price discrimination;
2. conditioning sales on exclusive dealing;
3. mergers and acquisitions when they may substantially reduce competition;
4. serving on the board of directors for two competing companies (Clayton).”

By outlawing these, prevents companies from merging with other companies to the point of monopolizing and preventing other businesses from competing with them while offering competitive prices and making profits.

        Currently, competition laws allow everyone to do business in the market, though not all goods are allowed to be produced and sold in a business. Certain drugs, for example, are illegal to sell or be in possession of. While you are limited in some aspects on what can be sold, just about anyone could decide to start up a business. A business can decide what prices they want to charge consumers for their goods and services based on the law of supply and demand, how much the company paid for a product and based off of what they competition may have the same product for. They are also free to advertise for these goods and services they are providing, while advertising isn’t free in many cases, it can be based off of what form of advertisement the business uses. By keeping laws in place to limit certain moves that businesses can make, it allows for more people to open a business and try it for themselves.