Laws and Regulations

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Chris Mc Claughry

DeVry University

With all the news stories you hear about CEO or the higher-ups or companies using insider trading, embezzling or the like. It is no wonder the U.S. has laws to further fair, balanced, and competitive business practices. The success or failure of said regulations and legislation can be determined by which side you view it from. We are protected by these laws from unreasonable trade, price discrimination, and anti-competitive business practices.

New laws always bring out the skepticism or doubt about how the law will actually work in practice as opposed to theory. How well will this law, regulation, or act promote fair and competitive business practices? As consumers antitrust laws affect us every day.

In 1890, Congress enacted the Sherman Antitrust Act, a law designed to restore competition and free enterprise by breaking up monopolies. The Act of July 2, 1890(Sherman Anti-Trust Act) states that

“This Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies (pg.1).”

The original intention of the Sherman Antitrust Act was to protect consumers from big businesses that were using unscrupulous means to raise prices artificially, such as intentionally producing too few goods to meet consumer demand and thereby driving up the products' value and price. The US Department of Justice says, “The principal law expressing our national commitment to a free market economy in which competition free from private and governmental restraints leads to the best results for consumers (pg.2).”

The government has tried to keep the trade industries and consumers safe from being treated unfairly during business practices. So in 1914, Congress passed two more laws designed to bolster the Sherman Antitrust Act: the Clayton Antitrust Act and the...