Businesses traditionally sell their services in fixed-price packages (hourly rates). Cheaper service providers will attract more consumers than expensive ones. However, there's a flip side to this coin small businesses that give their services at lower prices may experience a decrease in their quality of work.
The antitrust acts aim to protect consumers, promote competition, and foster innovation. The antitrust laws also aim to prevent the concentration of economic power in specific companies, industries, or markets that are against the public interest by facilitating the breakup of companies with excessive market power.
To avoid unfair competition and unreasonable prices, antitrust legislation focuses on monopolies. Anti-monopoly laws usually touch on four different areas: agreements between or among competitors, contractual arrangements between purchasers and sellers, the pursuit of monopoly power, and mergers (when companies combine to be "bigger" than other companies).
Anti-competitive business practices are primarily prohibited under the Sherman Act. The Sherman Act (15 U.S.C. 1, et. seq.) is a Federal law that applies to monopolies and attempts and conspiracies to monopolize any part of interstate commerce.
The Sherman Antitrust Act of 1890 is one of the world's most critical pieces of federal legislation for antitrust. As the foundation for U.S. antitrust regulation, it superseded legislation created by individual states. It was enacted in response to growing concerns about monopolies in the U.S., which affected both businesses and consumers.
The Sherman Antitrust Act created the legal basis for enforcing both indictments for and injunctions against anti-competitive business practices. And it made private lawsuits available for their enforcement. Later, other judicial cleavages to the act came in the Clayton Act of 1914 and the Hart-Scott-Rodino Act of 1976. The agency entrusted with enforcement of the act became the Federal Trade Commission in 1914.
1914 was the year the Federal Trade Commission (F.T.C.) was created to protect consumers from unfair or deceptive practices by companies. It also ensures fair competition amongst industries and monitors anti-competitive behavior in companies.
The D.O.J.'s Antitrust Division punishes companies found to be breaking these laws and also tries to prevent anti-competitive behavior. Antitrust violations have damaging consequences for companies as the D.O.J. has the power to impose substantial fines, require a company to change its practices, and even require divestiture of assets.
