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Antitrust laws are rules that "promote competition" by reducing a firm's market dominance. This frequently entails dismantling monopolistic enterprises as well as making sure mergers and acquisitions don't excessively concentrate market power.
Moreover, antitrust rules prohibit multiple businesses from "colluding" or forming a cartel in order to restrict competition through tactics like price fixing.
Antitrust laws are the broad group of state and federal laws that are designed to make sure businesses are "competing fairly". The term "trust" in antitrust describes a group of companies that band together or create a monopoly to control pricing in a specific market. Proponents contend that consumers benefit from reduced costs, higher-quality goods and services, more options, and more innovation due to competition among sellers and the necessity of antitrust regulations.
The primary laws that establish the foundation for antitrust legislation are the Clayton Act, Federal Trade Commission Act, and Sherman Act. In an effort to prevent rival people or companies from fixing prices, segmenting markets, or attempting to rig bids, the Sherman Act banned contracts and conspiracies restricting commerce and/or monopolizing sectors. The Federal Trade Commission Act outlaws unfair business practices and misleading behaviors. The Sherman Act does not prohibit certain practices, including price discrimination, exclusive dealing, and interlocking directorates, which were addressed by the Clayton Act.
Federal antitrust laws are currently enforced by the Federal Trade Commission (FTC), occasionally in collaboration with the U.S. Department of Justice (DOJ). The FTC can issue cease and desist orders or ask for injunctions against offenders after looking into claims of antitrust law violations. The DOJ may also bring legal action against alleged offenders and demand jail time for major infractions.
Antitrust laws apply not just to the United States but to other nations with similar laws protecting and fostering competition. The European Union (EU), for instance, has its own antitrust laws that forbid cartels, the abuse of dominant positions, and anti-competitive acquisitions. In order to ensure a worldwide approach to antitrust enforcement, the EU also collaborates with other antitrust authorities throughout the world.
