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American Business Practice and Laws (Essay Sample)


the paper evaluates various law that protect investors from fraudulent companies


American Business Practice and Laws
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The United Sates has many laws that protect customers and small businesses from competitive exploitation by large corporations. These laws are collectively known as the antitrust laws (SBA, 2002). They are comprised of both federal and state government laws and their main objective is to regulate business operations to maintain a given equilibrium of economic stability. The laws seek to ensure that there remains healthy business competition and thus, preventing monopolization of some businesses.
The Antitrust laws
The antitrust laws ensure healthy competition in business by implementing some rules (SBA, 2002). These include;
Colluding to fix market prices
This rule is meant to protect the consumers from the businesses in a scenario where the businessmen can conspire to alter the prices. This is due to the fact that altering the price can lead to economic exploitation of the customers, especially on products which are not easily available in the market. The law also protects customers from exploitation of prices for products which are mandatory, for example, fixing prices on drug products as the patients have no choice but to buy the drugs at whatever price.
Price Discrimination
This is mainly meant to protect the mall businesses from corporations. Corporations can offer buyers a low price for products and smaller businesses may fail to meet that price as they are still struggling economically. Price discrimination can lead to the demise of small businesses due to huge losses or lack of sales.
Conspiring to Boycott
This is another law that prevents businesses to withdraw from dealing with their competitors or some suppliers. Such discrimination is prohibited as it interferes with the balance of healthy competition.
Conspiring to allocate markets or customers
This prohibits the businessmen from trading in defined areas (that is, taking territories). Every business person is allowed to trade in whatever region they want if they feel that the market there is a god prospective. Dividing of territories leads to unfair competition as the large companies with industrial power can take up lucrative markets, leaving the small businesses with lesser lucrative markets.
This refers to the practice where only one business organization takes over all trading rights in a given region. This is deemed as unfair as other people wishing to establish the same business are not given the opportunity. Monopoly leads to poor services, exploitation of prices and even poor quality products as the customers do not have an alternative.
Effectiveness of the antitrust laws
I believe that the antitrust laws have been effective to a great extent to established fair and balanced competition among businesses. This can be evidenced by many observations. The first observation is that the private sectors do not have monopolies and any monopolies are government regulated ensuring protection of customers’ finances. Another observation is that throughout the years, small businesses have risen to become powerful business corporations. This would not have been realized if the laws were not effective. An...
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