The Evolution of Anti-Trust Policy in the United States (Essay Sample)

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The Evolution of Anti-Trust Policy in the United States
Legislations in the market serve a range of roles. Amongst the significant roles of legislation in the market is to ensure market efficiency and stability. The Anti-Trust policy is a set of legislations and government acts premeditated to mitigate and eliminate market problems such as monopoly while encouraging competition and facilitating allocative efficiencyCITATION McC21 \p 421 \l 1033 (McConnell, Brue and Flynn 421). The Anti-Trust policy has evolved over the years to feed off vital market parameters for monitoring market monopolization, such as business mergers and market concentration, to stay relevant in policies and consumer welfare.
The Anti-Trust policy includes four federal legislations that have been polished and extended through various amendments. The four legislations constituting the Anti-Trust policy include the Sherman Act (1890), Clayton Act (1914), Federal Trade Commission Act (1914), and Celler-Kefauver Act of 1950CITATION McC21 \p 421 \l 1033 (McConnell, Brue and Flynn 421). The Sherman Act of 1890, the first primary Anti-Trust legislation, has had several significant impacts on American historyCITATION Gio21 \p 87 \l 1033 (Giocoli 87). First, the Act interdicts combinations that limit local and international trade. Second, the Act proscribes trade maneuvers that challenge monopolizing trade within the US.
Since its enactment, the Sherman Act of 1890 has had significant historical impacts on market antimonopoly. Since its enactment, the Sherman Act of 1890 was rarely invoked due to the slim judicial understanding and interpretation of the Act as primarily civil only prosecuted a total of 23 cases, seven of which were criminal cases while sixteen were civil cases under section I of the ActCITATION McC21 \p 422 \l 1033 (McConnell, Brue and Flynn 422). The narrow scope of interpretation by the judiciary prompted the development and enactment of the Clayton Act of 1914, which solely elaborated on the two sections of the Sherman Act of 1890. The Clayton Act also prohibited the techniques used by firms in attempting to establish a monopoly in the US marketCITATION Gre20 \p 422 \l 1033 (Greenfield, Lange and Calln 422).
Anti-trust laws have been interpreted vastly since their enactment at various stages of history till now. Interpretation is based on behavioral monopoly and structural monopolyCITATION Pau21 \p 175 \l 1033 (Paul 175). The Sherman Act of 1890 brought stirred the corporate world in three evolutionary cases, the Standard Oil case of 1911, the US Steel case of 1920, and the Alcoa case of 1945 on market structure and shares, plainly indicating the difference in its interpretationCITATION McC21 \p 424 \m Gio21 \p 89 \l 1033 (McConnell, Brue and Flynn 424; Giocoli 89). These cases indicated that the enforcement of these legislations depends vastly on how they are interpreted. Enforcement varies in intensity depending on the enforcing officer or commission. The anti-trust policies' impact on the economy depends on the enforcer.
The Anti-Trust policy is vital in monitoring business mergers to prevent trade monopoly. Anti- Trust policy treats each merger differently based on its impact on world market concentration to maintain fair competition in the business marketCITATION Pau21 \p 178 \l 1033 (Paul 178). In trade, three basic mergers exist horizontal, vertical and conglomerate mergersCITATION McC21 \p 423 \l 1033 (McConnell, Brue and Flynn 423). Horizontal mergers occur between business competitors in the same geolocation selling the same products. Vertical mergers are businesses selling the same products at different production levels and have a buyer-seller relationshipCITATION McC21 \p 425 \l 1033 (McConnell, Brue and Flynn 425). A conglomerate merger is a complex merger between firms of different localities and trading in different products. Google's case in 2015 of being biased in advertising business online vendors selling from the Google platform has the most recent case of the Anti-Trust policy in actionCITATION McC21 \p 433 \l 1033 (McConnell, Brue and Flynn 433). If left unchecked, such mergers can reduce market competition by engaging in a behavioral monopoly-like.
The Anti-Trust policy utilizes market concentration to analyze market trends and track monopolization attempts. Market concentration is a way of estimating the market structure of a trade blockCITATION Pik18 \p 6 \l 1033 (Pike 6). Mergers are among the common factors influencing market concentrationCITATION Pau21 \p 6 \l 1033 (Paul 6). Market concentration is thus an essential aspect of determining and predicting monopoly trends in the market. An estimate of market concentration is directly proportional to the market valueCITATION Pik18 \p 6 \l 1033 (Pike 6). It offers invaluable insight into the firm intensity of competition and economies for policymakers.
Establishing market concentration can be achieved through various methods. However, the constant in all those methods is using the firm market shares in the computationsCITATION Pik18 \p 6 \l 1033 (Pike 6). The market shares are calculated using the Herfindahl-Hirschman index (HHI). HHI computes the square of every business firm within the market and adds the result to obtain a value greater than zero but less than or equal to 10,000CITATION Pik18 \p 7 \l 1033 (Pike 7). Minority shareholdings and institutional stakeholders of rival business firms are not displayed as they are assumed to be binary during calculations while using standard concentration measures, thus vouching for Adjusted HHI measuresCITATION Man17 \p 19 \l 1033 (Mancini and Nyeso 1