Question

The Standard Oil company was found in violation of antitrust law in 1911 and forced to break into 34 separate companies. Define antitrust law and describe how it protects competition.

Answer 1

Antitrust Law is the branch of law that is responsible for regulating trade by prohibiting illegal restrictions, price fixing and monopolies. It seeks to promote competition among existing companies in a market and the promotion of the quality of goods and services at the lowest possible price, guaranteeing an efficient market structure.

The Antitrust Law aims to promote "fair competition" among companies. It has had an important effect on business practices and the restructuring of the industrial sector in the countries where it has been adopted. Based on the premise that free trade benefits both consumers, businesses and the economy in general, the law prohibits different types of trade restrictions and the abuse of monopolization.

In 1890 the Sherman Antitrust law was established, which is considered the birth of the current antitrust policies. Subsequently, the Congress amended the law repeatedly during the fifties and thus they were adding the set of laws that make up the current Antitrust law.

Answer 2

The Antitrust Law protects competition in our society. In a fully competitive market, each competing business generally tries to attract customers by cutting prices and increasing the quality of it's products.