Antitrust Legislation detailed discussion

Antitrust Legislation

The first antitrust law, the Sherman Act, was passed by Congress in 1890. The antitrust law’s regulations were enacted to preserve free and unconstrained competition and enhance free trade, prevent exploitation of the consumers, and prevent mergers and acquisitions that may lead to lesser competition or creating a monopoly in the market. The law also plays an integral role in eliminating. The Federal Trade Commission was formed to ensure that the antitrust laws were observed. The laws prevent individual organizations from controlling the market by limiting the output and increasing the prices of the products in the market.

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The Sherman Antitrust Act became a very common antitrust law to date. The act highlights the remedies for the violation of the laws involving interstate commerce or local trade. The antitrust legislation does not only ensures that there is free trade but also prevents illegal agreements that may restrain trade,  fixing prices, rig bids, monopolization of any part of the interstate commerce, and allocation of consumers among the competing organizations. The antitrust legislations help to protect free trade, maintain fair competition, and increase economic efficiency.

The antitrust act was strengthened by the enactment of the Clayton Antitrust Act of 1914. The law outlaws various actions that may lead to monopoly and eliminate trade activities that may lead to a monopoly before it happens in the market. It is also important to note that the Clayton Act does not allow mergers and acquisitions of the companies that may lessen competition among the organizations. The antitrust law also prevents a company from acquiring shares of another firm that may kill competition among the companies.

Reply I

I agree with Chengru Li that most of the governments and capital are inextricably linked, and antitrust legislation is meant to protect the free trade and act as one of the tools for the government to maintain governance. It is true that the government may use the antitrust laws to preserve the monopoly of specific products such as the case of tea, salt, and iron in China, which were monopolize to prevent the ordinary people from producing, thus avoiding any threat to the government. The law plays a significant role in controlling balance in the society and market; this is because the monopoly will lead to excessive concentration of capital, thus resulting in vicious competition and an unhealthy market. I also agree with the author that the antitrust legislation needs to be built in a stable government. Antitrust laws help to protect free trade, maintain fair competition, and increase economic efficiency.

Reply II

Hassan Manzoor raises an important issue concerning the legislation of the Antitrust Law in 1890. It is clear that there was significant economic growth during the industrialization leading to advancement in transport: railroads ship and telegraphs, which enabled the various companies to grow and controlled the broader market. Major companies took control of the markets such as the oil industry that a considerable percent came under the control of Rockefeller. The significant companies controlled the prices of the commodity in the market because of the monopoly; they disturbed the free flow of the products. I agree with the author that the government passed the Sherman Act to preserve open and unconstrained competition, and enhance free trade, prevent exploitation of the consumers, and prevent mergers and acquisitions that may lead to lesser competition or creating a monopoly in the market.


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