Definitions: Antitrust

Definition

Antitrust is a term used in reference to a series of federal laws passed to break up monopolies, end unfair trade practices, and promote competition among businesses. The three landmark antitrust laws are the Sherman  Antitrust Act of 1890, the Clayton Antitrust Act of 1914, and the Federal Trade Commission Act of 1914. Many other states have even adopted their own antitrust laws in addition to these federal laws.

Business applications

Antitrust laws were established to break down large monopolies and encourage competition among businesses. The Federal Trade Commission enforces these laws to help guarantee that businesses and consumers both avail from increased options, lower prices, and competition to provide higher quality services and products.

Concerns

There are a couple of major concerns when it comes to antitrust laws—that they punish large, successful businesses and that they are very difficult to define and enforce. The argument for the former is that sometimes companies that are deemed “monopolies” are actually just the leading example in their field and other companies just haven’t created products that are on par to compete (i.e. Microsoft).  Also, most cases of antitrust violations are only enforced after a civil enforcement action is brought about or after a private party files a lawsuit. In such cases the Department of Justice investigates the claims and works with other agencies to gather  evidence and enforce any violations.

More information

In the past decade, there haven’t been many antitrust cases in the courts. To learn more about recent antitrust  cases, you can visit the Antitrust Case Browser or the U.S. Department of Justice site.

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