The antitrust laws were set by the United States’ Federal and individual states’ governments to regulate businesses and corporations. These laws were laid down to regulate them from growing too much and eventually oppressing the consumers. Likewise, they were also laid to prevent monopolies from exploiting consumers and therefore, offer necessary goods and services to all of them despite their financial status. Competition amongst the companies was encouraged; this would be the way to oblige them into producing good quality goods and services and at favorable prices (Jacobson and American Bar Association 2007). This was because of the many disadvantages that are associated with monopolies in any market. Some disadvantages linked with monopolies are production of substandard goods and services given that a monopoly market lacks competition, and hence has no need of ensuring that goods and services are of a high quality. Another one is the issue is the high pricing of their goods since they lack competition.
The antitrust laws severely scrutinized four market habits. These included the Walker process fraud, bid rigging, geographic market distribution. Geographic market distribution arises when individual companies that compete and are in different areas agree to avoid competition from others in their individual regions. In addition, the antitrust laws also scrutinized fixing of prizes where the businesses agreed to fix prices as they wished. Moreover, the four main antitrust laws are:
- The Sherman Antitrust Law
- Clayton Antitrust Law
- Federal Trade Commission Act
- Robinson Patman Act
The Sherman antitrust law has remained the most crucial of all. It was passed by congress to control abusive monopolies. It actually gave the government the power to dissolve monopolies. It opposed contact or combination to form trusts (monopolies), conspiracy, or restraints of commerce in some states and nations, which it declared as unconstitutional (Cefrey, 2003).
The Clayton Antitrust Law was designed to weaken the actions that suppress competitiveness since competition is very healthy in any market. Attempts to encourage anti-competitiveness in any way were prohibited. Practices like the fixing of prices, price discrimination are checked in this Act as they induce anti-competitiveness.
The Federal Trade Commission act provides consumer protection through ensuring a stable competitive market. It prohibits dangerous market practices that encourage anti-competitiveness price fixing and conspiracies in forming mergers. It punishes practices such as deceptive advertising, monopolization, and any defrauding etcetera. It ensured that the competition was not discouraged and even though it could not pass rulings, it was able to enforce them in the law courts (Hylton 2010).
The Robinson Patman Act was passed in 1936 to fight price discrimination. It amended the Clayton Antitrust Act of 1014 and even fought unfair competition. Similarly, it protected the small quantity buyers in the Act from exploitation by the large quantity buyers. It promoted same prices of products to everyone irrespective of the quantities purchased. This applied only to tangible products of the same quality especially food products.
How industrial regulation applies to the oligopolies
An oligopoly refers to an industry that is made up of a few but large firms. Generally, such firms gain some power in a way to set prices and normally end up abusing or discriminating the consumers. The act of differentiation allows them to set different prices without change of preference by the consumers. They are discriminative and the United States government usually discourages them and prevents actions that are geared to give them the market power. One way applied in regulating their growth is by allowing some to become monopolies, but with high regulations standards. Strong policies on price regulations are imposed on them to prevent them from setting prices.
How industrial regulation applies to monopolies
A monopoly is mostly a sole supplier of a certain commodity. It may produce substandard products due to lack of competition. The regulations body usually suppresses the growth of other firms by direct government policies, tough laws and regulations against them, imposing heavy tax on the existing trusts and encouraging small firms to venture into the industry through initiatives like raised subsidies and reduced taxes.
The Federal Energy Regulatory Commission
Federal power commission is its predecessor agency that enables the cabinet members to control the U.S. hydropower development. Overall, the independent regulatory agency regulates both the interstate and hydropower electricity.
Federal Communications Regulatory Commission
It regulates wired and broadcasting communication that is international and interstate communications by television, cable, radio, wire, and satellite. Its jurisdiction covers the US possessions, the 50 states and the District of Columbia.
Social regulation is a regulation by the government to look into worker safety, discrimination, product safety and pollution. It helps in ensuring that there is a fair trade on the market, and prevents the exploitation of consumers. It consists of the following bodies to name a few.
The federal Energy regulation Commission regulates the consumption of hydroelectricity, oil, petroleum among other types of energy in domestic, commercial and industrial purposes.
The Federal Trade Commission that makes rules and regulations concerning their national use of communications both wired and broadcast communication.
Food, safety and Inspection service which ensures that the commercial supply of egg, poultry and meat is safe, correctly packaged, labeled and wholesome.
Food and drug administration as the last body, is charged with keeping the public safe and promoting their health from dangerous diseases and ensuring that the food and drugs in the market are in good condition and in good supply.
Lastly is the public health service is tasked with the responsibility of ensuring the employment of competent professionals in the health services sector and to ensure that there is proper provision of health services in the United States.
References
Cefrey, H. (2003). The Sherman Antitrust Act: Getting big business under control. New York: Rosen Pub. Group.
Hylton, K. N. (2010). Antitrust Law and Economics. Cheltenham: Edward Elgar Pub.
Jacobson, J. M., & American Bar Association. (2007). Antitrust law developments (sixth). Chicago, Ill: Section of Antitrust Law, ABA.