What is Competition Law?
Competition Law, which is considered to be analogous with ‘Antitrust Law’, is the legal field that deals with the regulation of the commercial market in order to prohibit any or all commercial practices considered to be unethical or in direct violation of a fair and free market economy. As its name states, the stipulations and legal statutes expressed within the realm of Competition Law administer regulations with regard to competing businesses within a commercial market; due to the Constitutional entitlement expressed allowing citizens of the United States the right to the pursuit of happiness and prosperity in accordance to legality and ethical operation, Competition Law serves to institute preventative measures disallowing unfair market practices that may stifle the prospect of free enterprise.
Competition Law Statutes and Legality
Within the History of Competition Law within the United States, there have been a wide variety of court cases and legal action that has taken place with regard to the investigation and review of specific commercial activity; this has resulted in the passing of 2 legislative Acts considered to be the foremost authority with regard to regulatory measures corollary to commercial and business activity:
Sherman Antitrust Act (1890)
1.Who Proposed the Act?
This Act was proposed by Ohio Senator John Sherman
2. What Prompted its Passing?
Upon the formation of the Standard Oil Company, which was a fuel provider conglomerate founded by John D. Rockefeller, John Sherman had noticed that not only Standard Oil, but also its Trust Corporations, had allowed it to retain a monopoly over the fuel and oil industry. Due to the fact that Standard Oil was cognizant of its public view, it had formed smaller ‘Trusts’, which while under the control of Standard Oil, was not made public. As a result, the tenets expressed within Competition Law did not appear to be broken directly, due to the fact that the formation of trusts served to provide the illusion of competition within the Oil industry.
3. What Does the Act state?
The Sherman Antitrust Act – which is considered to be the foremost piece of legislation within the realm of Competition Law – prohibits the formation of trusts and subsidiary corporations in order to mask the existence of an industry-wide monopoly. As a result of monopolies within the Oil Market as a result of Standard Oil’s monopoly, Standard Oil was allowed to fix the pricing of Oil without regard; this forced consumers to patronize Standard Oil regardless of the presumed fairness within pricing.
Clayton Antitrust Act (1914)
1. Who Proposed the Act?
This Act was proposed by Alabama Senator Henry De Lamar Clayton
2. What Prompted its Passing?
Although the Sherman Antitrust Act was considered to mandate and regulate existing Competition Law within the United States, Senator Clayton considered to the Act to be vague with regard to mergers, exclusive contracting, and the exclusivity within certain industries with regard to employment; Senator Clayton wished to regulate the a balance of power within any or all commercial and business endeavors.
3. What Does the Act State?
With regard to Competition Law, the Clayton Antitrust Act is considered to be the responsible for addressing perceived ambiguities and vagueness within the Sherman Antitrust Act; this act helped shape modern Competition Law by outlawing exclusive dealing, predatory and discriminatory pricing, and the regulation of mergers and acquisitions.