The Inadequacy and Ineffectiveness of Antitrust Law (Research Paper Sample)

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Antitrust law.
INTRODUCTION.
Antitrust laws have been an essential topic of discussion in the field of business law for years. Antitrust laws govern the broad spectrum of what contracts entail. They regulate all matters of competition and advocate for the existence of healthy competitive markets in the U.S. Antitrust laws have been the subject of change over time. This is due to the emerging businesses and shift in the area of marketing. Laws are said to be dynamic because they change with the changing environment. Factors like technological advancements and the broader state of business transactions that have gone global are responsible for changing business laws.[Coleman et al. (2003) p346.]
The paper will concern itself with the viability of antitrust laws in the U.S. and how the changing times have affected their ability to cover all legal aspects revolving around competition and monopolies. The legal advancements of antitrust law will also be subject to scrutiny in this paper.
LEGAL DOCTRINES.
The law regulating trusts and monopolies in the united states of America is covered under antitrust law provisions. Antitrust laws are against unhealthy competition between companies, and the strategies evolved have proven to be very helpful in administrating and governing competition issues. They are also known as competition laws, and they regulate monopolies and other anti-competitive behavior.
For instance, the effects doctrine is an example of a legal principle that enables countries to fight monopolies in the international business arena. The effects doctrine removes procedural and jurisdictional barriers in dealing with global companies that feel the need to monopolize the market.
The restraint of trade doctrine is also an example of common law doctrines applied in early England during the 15th century. The principle is a known and well-recognized predecessor of the antitrust laws of the USA. The declaration was enacted to prohibit the entering into any trade agreements that went against the national public policy and welfare. Competitive behavior was recognized.[Yuen (1987) p2.]
HISTORICAL DEVELOPMENT OF ANTITRUST LAW.
Antitrust laws have progressed over the years due to the dynamic and ever-changing business world. The massive changes that have taken place over the years are responsible for the change in-laws. The history of antitrust law can be traced back to the late 19th century. Initially, in the period before the 19th century, antitrust law protection was still evident though not as significant due to the slow economic growth rate of the time.[Amato (1997) p8]
Attempts at discouraging monopolies and providing competition law in society started being visible in the roman empire during the Justinian times. The law at the time prohibited people from taking part in anti-competitive market behavior when dealing with the sale of grains. Grains were the primary commodity of the purchase at the time since industrialization was still far and yet to be realized. For this reason, it was so hard for the empire to make antitrust laws when there were no trusts to be governed.
The developments were also witnessed in other places in the world. In 1561, the court developed rules against industrial monopolies. The design of this law was that of patent protection, but the same was not so successful because of the widespread corruption practiced during the time. Later in the year 1623, the house of representatives in the olden day England came to the combined opinion to develop a legal statute against monopolies called the statute of monopolies. The statute was used in Europe until later in the !8th century when Europe experienced widespread economic panic leading to a stop in antitrust law progress.
Further developments in antitrust law were halted in Europe and the rest of the world until Canada enacted the 1889 legislation that provided for antitrust law. The act for the prevention and suppression of combinations formed in restraint of trade was passed in Canada to prevent monopolies. It was enacted just one year before the USA enacted the Sherman act in 1890. All the antitrust laws were borrowed from the common law regime.[Roger et.al (2002) 58.]
Currently, antitrust laws have been improved to cater to all areas of competition in business transactions. However, the laws are faced with the problem of enforcement.
RELEVANT STATUTE AND REGULATION.
THE SHERMAN ANTITRUST ACT.
The Sherman antitrust act was given the name because one Mr. Sherman, the then-senator of Ohio state, was at the frontline of spearheading changes in this regime when he pushed for the enactment of the law limiting monopolies by railroad owners. This era is marked by industrialization and big business in America. The likes of sir Vanderbilt and John Rockefeller were the big names of the time who owned and ran big companies which they controlled solely on their own. These big business owners had the power to change political actions and schemes in their favor. They manipulated the broad spectrum of business and had their hands deep inside the state's executive arm, thereby controlling societal development's essential aspects. These actions led to the overall decision that there was a need to embody the rules against monopolies in a legal document that would be referred to as the governing framework against monopolies.[Sherman antitrust act 1890.] [Hugh (1926) 387]
There was a need to develop this law because America hadn't experienced such growth in the past. The big business owners had wielded too much power that they were threatening the safety and security of small businesses. Sherman and the house members were very thoughtful and considerate when they enacted this statute. The Sherman antitrust act was passed unanimously in the year 1890 when the idea of big businesses running things became more visible and more realistic.
Initially, the idea of big business was seen as farfetched and not applicable in America though the common law had made some provisions about the same. Common law is seen as the mother of business-related law because of the integral role over the years as well as its power and domination over the various jurisdictions in the world/. Most laws draw their enforcement mechanisms and provisions from the common law texts and equity.
The Sherman act came to remedy the problems caused by big businesses when they monopolize the market and make it impossible for other companies to grow.[Robert (1966) 12.8 The Clayton Antitrust Act 1914.9 Jonathan et.al (2016) 27.]
THE CLAYTON ANTITRUST ACT OF 1914.
Congress enacted the Clayton antitrust act of 1914 following the government's need to safeguard small business interests by creating restrictions on big businesses. The act was crucial since it was designed to cover the aspects that the Sherman Act didn't cover or those that were bypassed by time. The Clayton antitrust act was passed to govern matters of mergers and acquisitions, which were used by the big businesses as clever means of broadening their scope. Big companies were aware of the laws against monopolies, and they wanted to circumvent the laws and continue buying companies and adding them to their portfolio. Therefore, the Clayton antitrust act was brought about to ensure that big businesses stopped these mergers and acquisitions, whose result was monopolized markets.[]
The Sherman act was considered inadequate hence the enactment of the Clayton antitrust act. Sherman act had provisions that were not sufficient in their scope. These provisions didn'tdidn't clearly outline the prohibited practices, and therefore, big business owners devised new ways and improved the old tactics so that they would beat the law. The Sherman act was bypassed by time and the fast-growing business sector, leading to the enactment of the Clayton antitrust act.
The progressive era of big business was a very appropriate time in the life of big business in America. Most big companies chose to be more friendly to the people and the state than the earlier times when they were modeled at profit-making. This change had been brought about by the provisions of the newly enacted Clayton antitrust act. The act brought about severe considerations for commodity pricing. It introduced the term price discrimination, which was aimed to deter big businesses from reconfiguring their prices in ways that were harmful to other companies which would not profit if they sold their commodities at such low prices.[]
The Clayton act was well designed to combat such instances because when big businesses produce and sell products at prices lower than the market threshold, they will attract more customers than other companies. The low pricing will force the other small businesses out of the market since they cannot compete well without attracting customers, nor can they lower their prices like big businesses. This will, in turn, force them out of the market due to losses incurred. The big business owners lie in wait the whole time as the small business suffers losses. The big business then comes in at the last minute to try and rescue the situation by buying them off at an insanely low price. After the big business has bought off the small business, they revive it and apply the low-price mechanisms on the latest business making it part of their big company via mergers and acquisitions.
Low pricing is discouraged because it is an elaborate plot by big businesses to conduct monopolies in ways that seem quiet and helpful. Yet, they are fraudulent and unjust ways of property acquisition.
THE FEDERAL TRADE COMMISSI...