Enforcement of Anti-trust Laws and Regulations in the US Essay

Custom Student Mr. Teacher ENG 1001-04 18 February 2017

Enforcement of Anti-trust Laws and Regulations in the US

Monopoly has been defined as a progressive situation in the market wherein only one service or product provider exists. Sole ownership and management of this production ensures no competition in the industry in which the firm is involved. The powers are being concentrated in a single individual or groups of people managing the single existing firm. Such case leads to various legal controversies impregnating different reactions especially in the public and legal conducts. The law-conscious community is reviewing ethical issues about this controversy searching for any factors of abuse that might be occurring.

Such conditions apply the law of Anti-trust. Enforcement of this kind of law accompanies complicated procedures and different processes. For companies to experience such interruptions is really a big deal of sales lost. In the United States, there are millions of establishments and not all of them are big and already established firmly. Some of this company are still gaining their phase and trying to make a break in the market competition. If their competitors are commercially big and has been established for quite long already, the monopoly of this competitor company is at high range.

If this continues, then breaks the purpose of free trade principles and blocks the growth of small raising business firms. Competitions in the market are usual and important since this is where everything upholds the business. The price modifications, deals and the transaction itself are all influenced by competitions. In this case, to the implementation of this Law is very much necessary in order to prevent the disruptions of free trade policy. These issues are covered in this paper aiming to the present laws, the means of committing violations for these monopolistic powers and the legal considerations involved in this issue.

Reinforcement of such law is also included in the discussion and analysis of this paper. The paper aims to answer the following query by critical analysis and a. What are Anti-trust Laws and how does it affect the business conditions? b. How do the authorities implement this rules and regulations? Cite the problems of implementations encountered upon its implementation phase. The implementation of such law in a wide scale basis proves to be difficult and can sometimes be problematic; since, with the anti-trust law, you are not anymore dealing with a single or small business firms but rather huge companies and mostly monopoly associations.

The scope of this study revolves only in the objective to answer the proposed questions. Anti-Trust Law Coverage The law of Anti-trust basically defeats the effects of monopoly or those that threaten free trade conditions. This competition law has different factors to which it can extend it effects. The Anti-trust law, first and foremost, negates any external or internal forces that halt free trading as well as market competition in every business firm. Second, any domination of such firm in the market is a form of abuse towards its competitors.

Lastly, any business activities that threaten the status and rights of competing business firms under free trade can be halted or suspended. In the United States, large business associations have aimed to control the market. In such case, the dominating business firm can set the price by its own will, manipulate customer and in some cases even refuse customers. These actions are greatly inhibited by the Anti-trust law (Hylton, 2003 p. 43-44). Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.

Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine This exact statement has been settled in the federal constitution, which evidently includes both transactions and negotiations from outside and inside the country that have an intention of disrupting free trade concept. The violation of Antitrust law is deemed as guilty of felony and punishable by fines.

The Monopoly Law: Anti-trust Law Dated back during 1990s, the economists have become entirely focused in the ongoing competitiveness especially in the commercial field. The frequent changes of the integral character of these business firms and the necessity for employment advancements in the middle of an evident competition and technologically oriented commerce have induced this impulsion. Community institutions have concentrated on promotion of economic efficiency by developing the policies that governs national economy and liberalization and privatization within national economy (Olson 1999, p. 1-2).

As provided the Anti-trust law, which is statutory, regulatory, and an essential part of the federal legal body that prevents and corrects unreasonable trade restraints, any commercial firms that solely centralize and null the competition, as in the case of monopoly, are actually committing violence against the said law (Emerson 2004, p. 485). The Anti-trust law comprises various regulatory laws that maintain capitalism, fair trade and market competition in the economy. Sherman act is the best example of an economic policy that negates unfair competition as promoted by the system of monopoly (Letwin 1981, p. ).

As stated by the Section II. Monopolizing trade a felony; Penalty of Sherman Act of 1890: Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

Application of this law provides access to far-reaching principle of the policy that the American economy shall continue competitive economy and null any attempts of eliminating these competitions (Letwin 1981, p. 3). Committing Violations by Monopoly Powers Certain controversies ignite the legal bodies regarding the major organization’s increasing monopolization status. According to Pearlstein (2004), any claims of occurring monopolization power require proof of price manipulation or any attempts to exclude competition in the market provided these are willful initiations and with maintenance of that power (p. 29).

Monopoly claims are subjected not only during its exercise but mainly in existence, meaning even the stage dormancy commits violation however; the rule of exemption still applies to some scenarios. Monopolization power that exists for a short period of time however, may not support the claims of monopoly (p. 231). Felony is the violation committed of the act of monopoly. However, there are certain limits and considerations analyzed in the ethical considerations in this law in order to balance the situation.

This forms controversy among commercial and legal firms (McConnell & Brue 2004, p. 00). Ethical Considerations: Behavioralists and Structuralists The ethical considerations of these cases primarily divide the views in terms of the firm’s structure and the performance of these business organizations. The two scenarios illustrated in the book of McConnell & Brue (2004), Economics: Principles, Problems, and Policies, are analyzed in this section. In 1911, the issue of U. S Steel case has established a rule of reason in the court. The conditions are the increased size and evident monopolistic powers of the said firm.

However, the firm has justified their claims in the court stating the presence of these powers is basically unintended. They have not caused any illegal actions among their minor competitors hence the court termed their case as “good trust” considering this not guilty. On the other hand, the Aloe Case that has occurred in 1945 has possessed clear indication of monopoly since it has supplied 90% aluminum in the market. Such case has led into incapacitation the minor aluminum producers. The court has announced guilty and violation of Sherman act sec II is pronounced (p. 600).

Structuralists view that the firm with most market shares are the legitimate target of this monopoly law since market competition are being affected. In this case, it is natural for the occurrence of such monopolistic behavior. Suggestion of this group involves the splitting of this huge firm into smaller units providing improvement and quality of performance as well. This applies in the case of Aloe since their firm shares the biggest part in the market. In another point of view, Behavioralists view the large firms make their way to possess unintended monopolistic status.

They view that this might be because of the quality of service, best products and reasonable prices rendered to the public. Such case, if proven to have absent competitive practices provides pardon from monopoly regulation of Sherman act (p. 601). Enforcement Antitrust laws have been objected by other business firms due to various reasons that impede wealth accumulation. If the antirust laws are designed to provide the socially optimal level of deterrence, then they have to discourage only those acts that reduce society’s wealth.

Antitrust laws overdeter if they discourage conduct that on balance increases society’s wealth (Hylton, 2003 p. 43). In terms of the telecoms company, some have viewed the conditions of Antitrust questionable as well. The design of this law is originally applicable to traditional manufacturing and distribution industries, since these markets are fast-moving corporations or the production of their products is very fast hence, production increases and the capacity of product provision from the sole supplier also occurs.

Operators often claim that their market is an “emerging market”; however, this condition is not anymore applicable if vast expanse of production to the point of hindering competition is already happening. This condition defeats the purpose of free trade as well as competitions. The statement of the Sherman Antitrust Act is not accurate, and this has resulted to legal confusions and inconsistencies. It has become unsuccessful in defining the meaning of such essential definitions as “trust,” “conspiracy,” “restraint of trade or commerce,” “monopolize,” or “combine.

Because of this, the end outcome of such term discrepancy is the struggling of United States courts for the provision of clear and accurate legal definition for this law. The Federal Trade commission is the ones responsible for the enforcement, monitoring and revocation of such law, and this organization has been doing this for the past 8 decades now. The capabilities of FTC are further enhanced and now able to suspend those business corporations or marketing industries that promotes anti-competitive actions.

The antitrust division, however, are the ones in charge of investigatory assessment and prosecutions of these associations found as such. If in case the antitrust division found grounds of anti-competition schemes, it seriously prosecutes the violations of these firms against the law. The FTC, on the other hand, also serves as the protocol manager that provides guidance for these corporations in terms of business restructuring or law-abiding marketing strategies in order to prevent the violation of such law. These firms need to adhere and abide in the U. S. aw of Competition in order to avoid the tendency of closure or suspension.

The Sherman Act has become the main branch of the antitrust law. This act is the one responsible for the maintenance of free and competitive business firms. Violations of anti-competitions and negation of free policies are filed under this act ever since the act has been promulgated. However, penalty system of this law has been modified; Individual offenders may be fined up to $350,000 and sentenced to three years in prison for each offense. Corporations can be fined up to $10 million, in some cases even more (Sherman Antitrust Act…, 2007).

According to the article brought by The Economist (200), entitled Trust and antitrust. (Effects of enforcing antitrust legislation), Untied States law body enforces the law strictly and seriously. In the past decades, the enforcement of this law has greatly improved; however, the focus has become limited. Instead of attacking business firms simply because they are big, trust busting has been restricted to cases where there is clear evidence of market power, as defined by economists rather than lawyers, being used to harm consumers.

However, during the time of Clinton administration, the scope and scale of antitrust implementation have expanded greatly, way beyond such well-founded cases as Microsoft. However, there are associated problems as well for the implementation of this law since the case per company violations are being scrutinized firmly. Moreover, confusion due to definitions and scope conditions are usually occurring. Mostly the problems that revolve under this law conditions are procedural and systematic processes. In the end, delays are resulted because of procedural difficulties.

Adding more into that are the overlapping authorities that need to be addressed upon filing, analysis and implementation of such law. In the current trend of antitrust implementation, bodies such as politicians, lawyers and economists are looking at this law as a big opportunity to attain fortune. It is because of the penalties and under-the-table transactions that occur between these people and the alleged company. In some cases, trust-busting associations such as Justice Department and the Federal Trade Commission even causes double or multiple jeopardy among these companies.

There are those people who even look at this scenario as business and not anymore justice. The ethical considerations of such law become fragile since, law bodies tend to view this as income source rather than free trade and competition issues. One of the examples of this condition has occurred in the ever popular, Microsoft. This company has encountered double up to multiple jeopardy because of Anti-trust violation. It may make sense, as suggested recently by Richard Posner, the court-appointed mediator in the Microsoft case, for Congress to ban state antitrust suits in such situations.

In addition, there is an argument, given that many monopolies and mergers are now global in reach, for some kind of world co-ordinating body, as suggested by Joel Klein, the Justice Department’s outgoing antitrust boss. Surprisingly, antitrust has now become an alluring profession for money-grabbing politicians, bureaucrats, economists and lawyers, all of whom will be likely to prefer opposing positions. Any lawyer or economist who knows about antitrust will earn a fortune from increased activity.

Free Enforcement of Anti-trust Laws and Regulations in the US Essay Sample


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  • University/College: University of Arkansas System

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 18 February 2017

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