Introduction
Since the late nineteenth century, the federal government has challenged business practices and mergers that create or may create a monopoly in a particular market. Federal legislation has varied in effectiveness in terms of preventing anti-competitive mergers.
Antitrust law is enacted by the federal and various state governments to (1) regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies; (2) promote competition; and (3) encourage the production of quality goods and services with the primary goal of safeguarding public welfare by ensuring that consumer demands will be met by the manufacture and sale of goods at reasonable prices.
Antitrust law seeks to make enterprises compete fairly. It has had a serious effect on business practices and the organization of U.S. industry. Premised on the belief that free trade benefits the economy, businesses, and consumers alike, the law forbids several types of restraint of trade and monopolization. These restraints can be classified into four main areas: agreements between or among competitors, contractual arrangements between sellers and buyers, the pursuit or maintenance of monopoly power, and mergers.
Enforcement of antitrust law depends largely on two agencies: the Federal Trade Commission (FTC), which may issue cease-and-desist orders to violators, and the Antitrust Division of the U.S. Department of Justice (DOJ), which can litigate. Private parties may also bring civil suits. Violations of the Sherman Act are felonies carrying fines of up to $10 million for corporations, and fines of up to $350,000 and prison sentences of up to three years for persons. The federal government, states, and individuals may collect treble the amount of damages that they have suf ...