There are 4 major acts created that are known as the Antitrust Laws. In the 1870’s and 1880’s, the Sherman Act of 1890 was created. This act made monopolies and conspiracies that tried controlling trade a criminal offense. This act exists with 2 provisions, the 1st is that every contract, blending in the form of a trust or otherwise, or attempt to conspiracy, in limit of trade or market among several States, or with distant nations is acknowledged to be unlawful.” nd
The 2 states a person intending to control, attempting to control, or collaborating with others to control any part of the trade and/or market among numerous states, or with distant nations, will be assumed guilty of a crime (later amended from “misdemeanor”) (McConnell, 2012).
In 1914 the Clayton Act made it illegal for companies to be involved in certain practices, but was meant more at disassembling current monopolies. The 4 key segments within this act are proposed to accentuate the Sherman Act. The first (Section 2) made pricing discrimination unlawful when not justified on the basis of cost differences and/or it decreases competition. The second (Section 3) bans binding contracts, when a manufacturer imposes that a buyer purchases additional goods/products as a condition for procuring a desired good/product. The third (Section 7) bans the purchase of stocks of a competing business when the result would be weaken the rivalry or competition. Lastly (Section 8) bans the circumstances where a director of one business is also a board member of a competing business in an effort to reduce competition. (McConnell, 2012)
The Federal Trade Commission Act of 1914 (created by the 5 member Federal Trade Commission (FTC), has joint Federal accountability with the U.S. Justice Department for imposing/enforcing the antitrust laws. The FTC has the power to investigate, scrutinize any unfair competitive practices on its own initiative or by requests of wrongly affected firms. It has the right to hold public hearings on grievances and, has the rights to issue cease and desist
orders in cases where biased methods of competition are discovered. (McConnell, 2012)
The Cellar-Kefauver Act of 1950 is an adjustment to Section 7 of the Clayton Act. This act closed a loophole within the Clayton Act that had allowed companies to buy up other companies to maintain a monopoly. The Cellar-Kefauver Act banned the acquiring of the assets of one firm by another firm when the overall effect would be a decrease of competition. (McConnell, 2012)
The Industrial Regulations proposed purposes for Oligopoly and Monopoly market structures. Oligopoly is where a handful of industries have considerable control over their prices and/or products, and in a Monopoly a single industry controls all aspects of pricing and/or product(s) with no close substitute(s). Due to this controlling factor, Industrial Regulations is used to lessen the market power of oligopolies and to prevent conspiracy and increase in market competition. It also used to lessen the marketplace power of monopolies. (McConnell, 2012)
3 primary Federal & State Regulatory Commissions
One of the 3 commissions governing industrial regulations is the Federal Energy Regulatory Commission (1930), has authority over national Electricity, gas/gas pipelines, oil pipelines and water powered sites. The other is the Federal Communications Commission (1934) that has the authority over Telephones, television, cable television, radio, telegraph, CB radios, and ham operators. Finally, is the State Public Utility Commissions (Various Years) which also has authority over Electricity, gas, and telephones. The purpose of the 3 Commissions is for the protection of the public from the mistreatment and abuse of the power controlled by natural cartels. (McConnell, 2012)
Social Regulation deals with the wider impact of business on customers, workers, the surroundings and third parties, and is concerned with the physical qualities of the goods produced, the conditions under which production occurs and the impact of production on society. Social Regulation can raise economic productivity and society’s welfare by removing precarious products, improving working conditions and safety, while also decreasing economic discrimination and decreasing pollution. (McConnell, 2012)
Federal regulatory commissions
One of the federal regulatory commissions is the Food and Drug Administration of 1906, which has the authority over safety and effectiveness of food, drugs, and cosmetics. The Equal Employment Opportunity Commission of 1964 that has the authority of hiring, promotion, and discharge of workers. The Occupational Safety and Health Administration of 1972 have the authority of industrial health and safety. The Environment Protection Agency of 1972 has authority of air, water, and noise pollution. The Consumer Product Safety Commission of 1972 has authority of safety of consumer products.