Have you ever found yourself wondering what keeps companies from charging consumers exorbitant prices for their goods and services? How about small businesses? What do you think helps them continue to expand and flourish in the face of fierce competition?
Continue reading to discover more about how these laws work in general and how they offer protection to both consumers and businesses. Below are some essential facts about antitrust laws that you should be aware of and understand.
What You Should Know About Antitrust Laws
These laws were made to keep all businesses in check while also encouraging healthy competition among them. Another benefit of these laws is the protection it gives consumers against greedy and money-hungry companies. These laws may vary depending on the country, but the core principle is the same.
- These laws ensure fair business competition in the market.
- They offer protection to consumers against exploitive and unscrupulous business practices.
- They have an impact on a wide area of business activities, such as monopolies, bid-rigging, and price-fixing.
- From the Sherman Act of 1890 to the Clayton Act of 1914 and the FTC Act, these laws evolved over time in the United States.
What Exactly are Antitrust Laws?
The regulations involved in these laws enforce a fair and open market. It prohibits predatory and questionable practices, including price-fixing, market division, as well as non-competition agreements.
It prevents large corporations from trampling on startups and small businesses, blocking these conglomerates from exploiting their monopolistic power to drive out smaller and new competitors.
Additionally, these laws also protect consumers by preventing businesses from overpricing their goods and services. In case a consumer ends up paying too much for an item, that person can file a lawsuit under these civil rights laws. It’s possible to sue for punitive damages, which would be three times the amount of money they overpaid.
What Is the Purpose of These Laws?
These laws safeguard both consumers and businesses. They protect against predatory pricing, as well as monopolistic and unfair business practices.
Just imagine what would have happened if these laws were not made or they ceased to exist. This would be a far better way to grasp their meaning and understand their purpose.
If these laws are not enforced, buyers will have no choice but be compelled to pay increased prices for products of low quality. Consumers will be confused and wouldn’t be able to tell apart a reliable company from a shady one – especially since anyone can do false advertising to deceive people into doing business with them.
Similarly, in the absence of these laws, conglomerates can drive smaller companies to go out of business. Instead of working on product improvements, these powerhouses can resort to using shady techniques to damage their competitor’s image and reputation. In fact, they can even drive out their competitors from the market by using blackmail.
It’s a scary situation, right? That’s why these laws are crucial in today’s world. They encourage businesses to put their focus on offering high-quality products and giving value-added services to their customers.
What Makes Up These Laws?
To have a proper understanding of these laws, it’s crucial to know about the following three pieces of legislation:
Sherman Antitrust Act
This act is what regulates businesses in check and encourages healthy competition in the market. Violations of this act have serious consequences. The fine for individuals can be up to $1,000,000, while for corporations, it can go up to $100,000,000, as well as prison sentences of up to ten years.
This legislation encourages the government to contest mergers or acquisitions that may impose unfair price increases on their customers. It also prevents the reduction of healthy competition that may result from Mandamp;A.
Federal Trade Commission Act
This legislation empowers the United States government to investigate and prosecute antitrust law violations.
Protect Your Rights as a Consumer and Business Owner
If you have a current problem with the consumer credit system as a result of price-fixing, then you’ve come to the right place today. Maybe your small business is on the brink of being eliminated from the competitive market due to your competitor’s shady and unfair business practices. If this is your case, you should get the advice of law experts such as Judge Andrew Peck, who can help you exercise your rights and come up victorious in your litigation settlement.