Key U.S. Anti-Trust Laws
| Law | Purpose |
|---|---|
| Sherman Antitrust Act (1890) | Outlaws monopolies and anti-competitive behavior |
| Clayton Antitrust Act (1914) | Targets mergers and practices that reduce competition |
| Federal Trade Commission Act (1914) | Created the FTC to enforce competition rules |
Why Anti-Trust Laws Exist
| Purpose | Explanation |
|---|---|
| Protect consumers | Prevent high prices, low quality, or fewer choices |
| Promote competition | Ensure multiple companies can compete fairly |
| Prevent abuse of power | Stop dominant firms from crushing smaller rivals |
| Encourage innovation | Competition pushes companies to improve |
Common Anti-Trust Violations
| Type | What It Means | Example |
|---|---|---|
| Monopoly | One company dominates the market unfairly | Controlling most of a market and blocking rivals |
| Price fixing | Competitors secretly agree on prices | Airlines agreeing to keep ticket prices high |
| Market allocation | Companies divide markets | “You sell in NY, I sell in CA” |
| Predatory pricing | Selling below cost to kill competitors | Big firm undercuts small players until they exit |