Competition Law

A Competition Law is a Law that is designed to promote fair competition within the market by preventing monopolistic practices and ensuring a diverse marketplace for consumers and businesses.

• AKA: Antitrust Law.
• Context:
  • It can (typically) be seen as a comprehensive charter of economic liberty aimed at preserving free and unfettered competition.
  • It can (typically) involve the enforcement of three core federal antitrust laws: the Sherman Act, the Federal Trade Commission Act, and the Clayton Act.
  • It can (often) include both federal and state statutes to regulate the concentration of economic power, particularly in regard to monopolies and other anticompetitive practices.
  • It can (typically) involve criminal and civil penalties for violations, though civil penalties are more common. Criminal prosecutions are limited to intentional and clear violations, with potential penalties including imprisonment and fines up to $100,000,000 for corporations and $1,000,000 for individuals.
  • It can (typically) be enforced by both the Federal Trade Commission (FTC) and the Department of Justice (DOJ), depending on the specific aspects of the law being addressed.
  • ...
• Example(s):
  • United States Antitrust Law,
  • European Union Competition Law,
  • Sherman Act,
  • Federal Trade Commission Act,
  • Clayton Act,
  • ....
• Counter-Example(s):
  • Free Market System,
  • Monopolistic Practice,
  • Laissez-faire Economy.
• See: Consumer Protection, Regulatory Law, World Trade Organization, Corporate Law, Market Competition, Anti-Competitive, Monopoly, Extraterritorial Jurisdiction, Free Trade.

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References

2024

• (ChatGPT-OpenAI, 2024) ⇒ Prompt: Summarize the concept Antitrust Law in 1- 2 paragraphs. ChatGPT (model:gpt-4-turbo-preview). Retrieved: 2024-03-24.
  • QUOTE: Antitrust law, also known as competition law in many countries, is a body of laws and regulations designed to promote fair competition for the benefit of consumers and prevent monopolistic practices that could harm market dynamics. Its primary goal is to safeguard consumer interests by ensuring that they benefit from lower prices, higher quality products and services, and innovation, which are typically the outcomes of healthy competition. Antitrust laws achieve this by prohibiting various forms of anticompetitive conduct, such as monopolization, cartels, and mergers that significantly lessen competition, as well as other business practices that could unfairly restrict free trade and limit the entry of new competitors into the market.

    In the United States, the foundation of antitrust law is formed by three key legislative acts: the Sherman Antitrust Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914. These acts empower the Department of Justice and the Federal Trade Commission to enforce regulations that prevent anticompetitive practices. Around the world, the principles of antitrust law are similarly enforced by respective national bodies, such as the European Commission in the European Union, which oversees competition policy. The application of antitrust law varies significantly from one jurisdiction to another, reflecting differences in policy priorities, economic models, and historical contexts. However, the underlying intent remains consistent: to maintain competition and protect consumers from the detrimental impacts of reduced market competition.

2021a

• (Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/Competition_law Retrieved:2021-2-16.
  • Competition law is a law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. Competition law is known as antitrust law in the United States for historical reasons, and as anti-monopoly law in China and Russia. In previous years it has been known as trade practices law in the United Kingdom and Australia. In the European Union, it is referred to as both antitrust and competition law. The history of competition law reaches back to the Roman Empire. The business practices of market traders, guilds and governments have always been subject to scrutiny, and sometimes severe sanctions. Since the 20th century, competition law has become global. The two largest and most influential systems of competition regulation are United States antitrust law and European Union competition law. National and regional competition authorities across the world have formed international support and enforcement networks. Modern competition law has historically evolved on a national level to promote and maintain fair competition in markets principally within the territorial boundaries of nation-states. National competition law usually does not cover activity beyond territorial borders unless it has significant effects at nation-state level. Countries may allow for extraterritorial jurisdiction in competition cases based on so-called "effects doctrine". The protection of international competition is governed by international competition agreements. In 1945, during the negotiations preceding the adoption of the General Agreement on Tariffs and Trade (GATT) in 1947, limited international competition obligations were proposed within the Charter for an International Trade Organisation. These obligations were not included in GATT, but in 1994, with the conclusion of the Uruguay Round of GATT multilateral negotiations, the World Trade Organization (WTO) was created. The Agreement Establishing the WTO included a range of limited provisions on various cross-border competition issues on a sector specific basis.

2021b

• (Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/Competition_law#Principle Retrieved:2021-2-16.
  • Competition law, or antitrust law, has three main elements:
    • prohibiting agreements or practices that restrict free trading and competition between business. This includes in particular the repression of free trade caused by cartels.
    • banning abusive behavior by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, and refusal to deal.
    • supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licenses or access to facilities to enable other businesses to continue competing.
  • Substance and practice of competition law varies from jurisdiction to jurisdiction. Protecting the interests of consumers (consumer welfare) and ensuring that entrepreneurs have an opportunity to compete in the market economy are often treated as important objectives. Competition law is closely connected with law on deregulation of access to markets, state aids and subsidies, the privatization of state owned assets and the establishment of independent sector regulators, among other market-oriented supply-side policies. In recent decades, competition law has been viewed as a way to provide better public services. Robert Bork argued that competition laws can produce adverse effects when they reduce competition by protecting inefficient competitors and when costs of legal intervention are greater than benefits for the consumers.

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