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Anti-trust laws were designed to protect consumers from companies that desired to corner the market and artificially inflate prices. The goal was to limit the economic power of companies and to ensure that business continues to function. These anti-trust laws force companies to break up into smaller entities thereby creating competition and lower prices. What we might not know is where all these anti-trust laws came from. The origin of these laws came from the populist movement of the 1870’s. The federal government chimed in and enacted the Interstate Commerce Laws around 1887 which gave the government the power to actually regulate interstate commerce. The first anti-trust law came out in 1890 under the Sherman Act. One of the major reasons why these laws were passed was because railroad companies would take advantage of farmers. These farmers jumped into action and demanded the government control the railroad companies. Back then there was only one carrier at the most and farmers had no where to turn if they hoped to ship their products. The railroad companies forced farmers to pay excessive freight charges. Anti-trust laws are part of the U.S.’s economic policy and are subject to interpretation from courts. Thus what would be considered unfair business practices in one environment would be considered completely outrageous in anther. Under such circumstances the government can force companies to break up into smaller entities. Mergers in the modern market is becoming more common and so will the propensity of having more anti-trust actions take by the government. One of the reasons why mergers are becoming more common is because there is much more global competition out there and companies are forced to eat each other in order to keep profits going up. There are many reasons why companies might buy out another one. The number one reason is to increase overall market share, to diversify their operations, to attract new technology and to force out competition that may become stronger. As this policy continues a company becomes so large that anti-trust could be enacted. Let us take the example of Microsoft. Microsoft is a very progressive and intelligent company. They have bought their competition, expanded their market share in a saturated market and developed their own operating systems. The problem was that by having the most popular operating system for computers software developers couldn’t get their products to the market. Someone filed an anti-trust complaint. Murad Ali, a two-time published author, writes articles and offers advertisement space for businesses. Visit http://www.thenewbusinessworld.blogspot.com
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anti-trust laws, Microsoft, Sherman Act, unfair competition,
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