by Tabren Wyldstar

Created on: April 09, 2010

Competition law, known in the United States as "antitrust" law, is a body of law addressing the abuses of monopolies and monopolistic conspiracies.  The basis of competition/antitrust law is the premise that competition is beneficial to both society (by giving us product and service diversity and general quality improvement) and to industry (preventing smaller businesses from being shutout of the marketplace).  The origins of competition/antitrust law can be traced as far back as the Roman Empire.  With the potential of monopolies and conspiracies to control and manipulate the economy of nations and even entire regions, the need to regulate such matters can dramatically affect the strength and vitality of that economy.  Thus governing bodies of competition/antitrust law are designed to address three fundamental principles.

The first principle covered by competition/antitrust law is the support and encouragement of free trade and competition.  Under the Sherman Antitrust Act (15 U.S.C. § 1-7), the United States Congress gave the Federal government the responsibility and authority to investigate and prosecute cartels (groups formed by competing individuals or firms to control one or more markets) and monopolies (and individual or single firm controlling one or more markets).  Such organizations often control vital natural resources or critical infrastructure necessary to do business in the affected industry.  Historic examples would include Standard Oil (which controlled the majority of oil distribution facilities in the late 19th to early 20th century) and Monsanto (which has control over much of the global commercial seed market).  As explained by the Supreme Court of the United States, "The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market.  The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself." (Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993)).

The second principle found in competition/antitrust laws is the banning of the tools or behaviors used by those seeking control over a market or industry.  These fall into two general categories: pricing controls and market barriers.  Firms engaging in violations of competition/antitrust law seek to limit or block access by competitors to the market place,

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