The regulation of Monopolies & the Microsoft Trial
By: Ashleigh Magliano
Larger companies can become big threats to other smaller companies that are in a given market due to their power and innovation. Sometimes this can become more than a threat, and it turns to no competition at all between the markets due to the monopolization of a company. A company becomes a monopoly when it gains the control of the industry and has obtained the ability to change the output prices in that specific industry. With such power this opposes a threat to other businesses. The government has set up specific regulations for monopolies to control what they ...view middle of the document...
Created to keep up with the regulation of monopolies is the Federal Trade Commission and has the most impact on today because it is still currently used. It was created in 1914 as a battle to “bust the trusts” by creating fair competition through prohibiting unfair trade. In the same year the Clayton Antitrust act was set up to help slidify Federal trade Commission which at that time was originally known as the Federal Commissions Act. (Wallechinsky, David, FTC) Through the use of this act it became very helpful on stopping monopolies from occurring that it became a necessity for the economy and it became known as the Federal Trade Commission when a the first building for the Federal trade Commission was built in 1938 by President Roosevelt. The building today is still the functioning home for the Federal Trade Commission. (History,FTC)
Also known as FTC, it was placed in order to protect the american consumers. Against anti competitiveness and the ability to give consumers choice the desired end result was to make it so products were at a low prices for consumers could have a fair choice and create efficiency and innovation. Today it is still in effect after over a hundred years and its dual focus is still on promoting competition as well as protecting the consumers. When it comes to promoting competition FTC does this currently through educating about the importance of steady competition and the responsibilities that you have. They also perform investigations when necessary and sue the businesses that are not complying with the law. FTC protects the consumers through three factors, price, selection, and service. (WhatWeDo, FTC) Keeping prices low and the product selection at a variety, this makes it so that our economic market is open and free and is enforce through the antitrust laws. Through monitoring the market is a way that they based the appropriate changes to make for the market.
Another impact on large business’s was created in 1914 called the Clayton Antitrust Act. This act was put in place as a support act to regulate monopolies. This act was entitled to do many things “Protect trade and commerce against unlawful restraints and monopolies” and was also entitled “To reduce taxation and provide revenues for the government and other purposes”. (63rd Cong., Sess. II, p. 730) This legalized strike, picketing and boycotts that were kept peaceful. This act prevents the attempt to freeze out local competitors with price reductions, it also prohibits exclusive sales contracts. The act is enforced by the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice.The act is important because it helps prevent workers from working with long hours with a low pay rate.
How Governments Regulate Monopolies
The government uses six different tools that can be used to determine and regulate the economy. One way would be price capping through limiting price increases in areas such as the OFWAT (tap...