Business trusts: denotes big businessCartels: denotes big businessCompetition law: name given to antitrust in other countriesPICTURES:“There is considerable controversy amongWTOmembers, in green, whether competition law should form part of the agreements” (“Competition Law”, n.d.) “The economist's depiction ofdeadweight lossto efficiency that monopolies cause” (“Competition Law”, n.d.).PROSPECTS:Benefits Achieved: (Lawrence, Weber, & Post, 2005, p. 192)oDisband monopolistic activities through deregulationoEnhances interstate and international commerceoEnsures competitive industry and economyoPreserves competitive market pricesPage 5 of 10
BMAL 560oProtects consumers against unfair business practicesoProtects consumers purchasing power by saving jobs and businessesoRestricts price discrimination unless justified by costoCompetition promoted fosters technological innovationExplained Use: (Meier et al, 1998, p.75-108)oEnables federal government to bring litigation against businessesoEnables state government to bring litigation against businessesoEnables private citizens to bring litigation against businesses through stateoInduces competition and cooperation through harassment, harm, and extortion oProhibits use of power to control marketplaceOpposing Viewpoints and Alternatives: (Werden, 1992)oAntitrust laws do more harm than goodoAntitrust doesn’t stimulate true competitionoExistence of antitrust laws discourages business from socially useful activityoAntitrust’ “predatory pricing” is ineffective and does not workoSuspicious and critical of government intervention in economyoLet the market and economy self-regulateoImpact of antitrust policy on the competitiveness of U.S. firms internationallyoEconomic concentration eliminates effective price competition and reduces consumer choices (Lawrence, Weber, & Post, 2005, p.196-197)PROBLEMS:Enforcement is scarce and sketchyLitigation is lengthy and requires extensive time and moneyInterpretation and vagueness of act; businesses unclear on provisionsCases examined and judged under a “rule of reason” analysis (An Antitrust Primer, 2005.)Insufficient resources to implement provisionsSubject to bias and inaccurate informationChallenged since inception due to language ambiguitiesForever balanced between being too wide-reaching and too narrow in scopePERFORMANCE:Very effective in deregulation and as an anti-union toolPage 6 of 10
BMAL 560Used as a tool to induce cooperation through harassment and harm Presidents Theodore Roosevelt and William Taft sued 120 companies under provisions of theSherman Antitrust Act (Werden, 1992)U.S. Supreme Court (1911) agreed that Standard Oil violated the Sherman Antitrust Act In 1982 Reagan administration used Sherman Antitrust Act to dismantle AT&TIn 1999 Department of Justice sued Microsoft under Antitrust Act provisionsProtects competitive process of U.S. economyHailed as a “consumer welfare prescription” by U.S. Supreme Court (DeMasi, 2007, p.36)
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- Summer '14
- Competition law, Sherman Antitrust Act, Tying