Questions in Antitrust law. Case examples - Essay Example

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Antitrust laws are body of governing principles that seek to enhance favorable business environment through promoting fair competition as well as protecting consumers in addition to wronged competitor businesses against anti-competitive practices within the business environment…
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Questions in Antitrust law. Case examples
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Download file to see previous pages Antitrust laws aim at removing aspects of monopoly within business environments and unfair business practices (Hylton 45). According to Hylton (47), actions that are deemed to be capable of hurting business operations and/or consumers are regarded those that contravenes antitrust laws. Such actions are therefore punishable by law since they go against provisions of business operations guiding principles as defined by antitrust laws such as Sherman Act 1890 and Clayton Act of 1914 amongst others. In order to enhance fair business competition and practices, antitrust laws regulate commerce and its auxiliary services through prevention of any unlawful restraints, monopolies, and price fixings with an aim of not only promoting competition but also encouraging production and provision of high quality goods and services (Hylton 51). Any antitrust law developed within a state of a nation must always focus on safeguarding public welfare. Safeguarding public welfare is attainable through making sure that consumer demands, specifications, needs, and expectations are adequately and timely met through manufacture, production, and sale of goods at reasonable prices. This is true in the case of NCAA v. Board of Regents, 468 U.S. 85 (1984). Nonetheless, despite the fact that antitrust laws aim at reducing levels of monopoly in a bid to enhancing competition, monopoly in itself is not considered unlawful. However, Hylton (61) confirms that if a firm having monopoly powers uses its status to engage in anti-competitive actions thereby infringing on the welfare of the public then such actions amount to violation of antitrust laws. For a claimant to prove that a monopoly organization misused its powers to violate provisions of antitrust laws there is need to identified that the firm in question is a monopoly, that the firm acquired or preserved its monopolistic power through exclusionary of anti-competitive actions, and that claimant’s welfare has been adversely affected due to suffering proximate losses that are a direct consequences of such exclusionary or anti-competitive actions by the monopolistic firm (Hylton 67). In this scenario, there is no doubt that Consumers Power Company (CPC) is a monopolistic firm that produces and distributes power to retail customers in Ohio, Kentucky. By the virtue of being a monopolistic firm, CPC has not violated the provisions of antitrust laws. Unfortunately, CPC is using its status as a monopoly to charge higher rates to the consumers. The idea of using the monopolistic position or power to charge higher rates is a violation of antitrust laws. One of the aspects of antitrust laws is that an individual or firm should not employ anti-competitive actions or exclusionary actions to interfere with the welfare of the public. Power is such an important resource or need for consumers. Therefore, by charging higher rates, consumers may end up not meeting their needs and demands. In this regards, CPC has violated the antitrust laws by using its monopolistic powers to charge higher rates. As identified earlier on, antitrust laws provide that there should be reasonable pricing in distributing or selling a good or a service. Such higher rates are considered to be unreasonable hence CPC has violated antitrust laws through charging higher rates based on its monopolistic status. Moreover, CPC’s refusal to sell power on wholesale to the Tri-State Electric Cooperative (TSEC) and the municipalities is an action that prevents fair competition (Hylton 53). Every organization must not act in a way that it prevents free and fair competition within the business environment. Formation of TSEC and the municipal ...Download file to see next pagesRead More
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