Understanding Federal Antitrust Policy
Antitrust policy, also known as competition policy, is a set of laws and regulations designed to promote competition in the marketplace. This policy is enforced by the federal government through the Department of Justice and the Federal Trade Commission. Antitrust policy is intended to ensure that companies do not engage in anticompetitive practices, such as price fixing and market allocation, which restrict competition and lead to higher prices for consumers.
Goals of Antitrust Policy
The primary goals of antitrust policy are to:
- Promote competition and economic efficiency
- Protect consumers from unfair business practices
- Ensure that markets remain open and dynamic
Antitrust policy seeks to prevent companies from engaging in practices that would limit competition, such as price fixing, market allocation, and mergers and acquisitions that create monopolies.
Enforcement of Antitrust Policy
The Department of Justice and the Federal Trade Commission are responsible for enforcing antitrust policy. The Department of Justice focuses on criminal enforcement, while the FTC focuses on civil enforcement. The Department of Justice can pursue criminal antitrust violations, such as price fixing and bid rigging, while the FTC can pursue civil violations such as unfair or deceptive business practices.
Examples of Antitrust Violations
Examples of antitrust violations include:
- Price fixing – when companies agree to charge the same price for a product or service
- Bid rigging – when companies agree to which company will win a bid for a contract
- Market allocation – when companies agree to divide markets and customers between them
- Monopolization – when one company has such a large market share that it can control prices and exclude competitors
Conclusion
Antitrust policy is an important part of protecting competition and promoting fairness in the marketplace. By enforcing antitrust laws, the government can ensure that companies do not engage in anticompetitive practices that could lead to higher prices and reduced competition.