What is the purpose of antitrust law?
The purpose of antitrust law is to promote competition and prevent unfair business practices. Antitrust law works to prevent monopolies and protect consumers from anti-competitive behavior. In California, the Sherman Antitrust Act of 1890 is the primary law governing anti-competitive behavior. It seeks to protect against any effort to limit trade, such as price-fixing, market division, and exclusive contracts. The U.S. Supreme Court has said that the purpose of the Sherman Act is to protect competition, not competitors. The Clayton Antitrust Act of 1914 is another important piece of antitrust legislation. It builds upon the Sherman Act by prohibiting certain activities such as price discrimination and mergers that may lead to a monopoly. The Clayton Act also strengthens private lawsuits and gives the federal government authority to directly prosecute some cases. The Federal Trade Commission Act of 1914 established the Federal Trade Commission (FTC). The FTC is tasked with enforcing antitrust laws by investigating and bringing charges against businesses that are engaging in unfair practices. The FTC can also issue cease-and-desist orders and impose fines on businesses found to be in violation of antitrust law. All together, antitrust law is designed to protect competition and encourage fair business practices. It works to ensure that consumers are protected by preventing companies from using their power to gain an unfair advantage over competitors, control the market, and raise prices.
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