Antitrust Law seeks to prevent the monopolization of by organization acting as a monopoly to exert undue market power. Measures by which such monopolization occurs in order to unlawfully gain an upper competitive hand with respect to sales are deemed illegal. Thus, the monopolist may not use its power rather than the merit of its product to conduct business, nor may it carry out actions that result in the restriction of trade.
There are common features connecting antitrust laws and systems in countries worldwide. Prohibitions against horizontal agreements between firms form one aspect of the law. Thus, cartels that intend to exercise a system of market-sharing are not allowed. Price fixing and limiting production or restricting trade are prohibited under antitrust law. Certain vertical restraints within organizations fall into the category of abusive trade. At its pinnacle is the abuse of market power by companies using the monopoly status to effect monopolization. These similarities unite the antitrust systems in different countries.
However, many differences are also seen within antitrust law depending on the location. Issues regarding the precise definition and ramifications surrounding terms such as competition, competitive and anti-competitive do not always imply a consensus of opinion. There are cases where voices are heard against the necessity for antitrust laws. The argument here is that competition may be controlled by means of another type of law or policy. Certain countries consider the priority to be the regulation of large enterprises and how they use their size to exert market power; others are more focused on removing obstacles to what they view as free market competition.
Antitrust laws set up a legal system whereby monopolization does not occur. Although a monopoly is not in itself illegal, the utilization of power by unlawful means to exercise a strategy of monopolization is. Circumstances differ as to what constitutes unlawful or illegal means. In most cases the implication is that unlawful refers to a monopolist using power, rather than the merit of the product it is marketing, to boost sales. Thus the monopoly, not the quality, determines the sometimes unfair distribution of power and competitive practice.
The goal of antitrust law is to insure that one player or a group of players does not assume dominance in the market field. The raising of prices by artificial means or the restriction of supplies by methodologies incorporated by the dominant power are further disallowed by antitrust laws.
Antitrust laws are enforced by government officials to prevent the monopolization of power. Generally this applies to two combinations of business organizations: the close-knit combination, or a loose-knit enterprise. The former comprises trusts, holding companies, mergers and consolidations; the latter a loose-knit confederation.
The nature of antitrust law may be perceived to be fluid, depending on the country of origin. In the United States the dominant theme pertaining to antitrust law is the upholding of economic efficiency in a balanced competitive environment. Consumer welfare is also at the heart of the antitrust legal system. Although the prevention of monopolization is paramount all over, in Eastern Europe, South America and various other international locations, antitrust laws appear to be more intently focused on preventing monopolization and facilitating demonopolization. Additionally, there is a focus on state control and planning giving way to liberalization and privatization.
The concept of antitrust is not only manifest in policies labeled antitrust law, but may also be seen in countries where the terminology used refers to laws against unfair competition. Even in countries where the term antitrust is used, the law may also fall under the umbrella of competition and fair trading law. It is also significant that antitrust laws in different countries may enjoy a greater or lesser degree of prominence and adherence.
In Europe, antitrust law originated for economic and political reasons. Antitrust laws were incorporated into the Treaty of Rome in 1957. Judge Bellamy advocated the uniting of people in Europe through the antitrust policies in the Treaty. In the United States, the Sherman Antitrust Act of 1890, proposed by Senator John Sherman, still serves to insure that antitrust regulations are upheld. Throughout the years amendments have been made to the Act, through the Clayton Act of 1914 and the Robinson-Patman Act of 1936, as well as regulation enforcement through the Federal Trade Commission Act of 1914.
Antitrust cases may be brought by the government acting against the accused organization, or litigation may be instigated by private parties.