{"id":2909,"date":"2023-02-19T16:11:06","date_gmt":"2023-02-19T16:11:06","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/antitrust-legislation\/"},"modified":"2023-06-27T15:38:42","modified_gmt":"2023-06-27T15:38:42","slug":"antitrust-legislation","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/antitrust-legislation\/","title":{"raw":"Learn It 5.5.2: Consumer Protection Laws","rendered":"Learn It 5.5.2: Consumer Protection Laws"},"content":{"raw":"<h2>Antitrust Regulation<\/h2>\r\nThe goal of <strong>antitrust legislation<\/strong> is to create and maintain a competitive market that results in lower prices, higher quality, more choice, and more innovation. The mission of the Federal Trade Commission (FTC) and the U.S. Department of Justice Antitrust Division, is to enforce antitrust laws which support a competitive marketplace. Three pieces of legislation serve as the core of federal antitrust laws.\r\n<h3>Sherman Act<\/h3>\r\nThe first act regulating competition was the Sherman Antitrust Act, passed in 1890 to prevent large companies from monopolizing, or dominating, an industry and making it hard for smaller firms to compete.[footnote]OpenStax.org. \u201cA Understanding the Legal and Tax Environment - Introduction to Business | OpenStax.\u201d Accessed December 4, 2022. https:\/\/openstax.org\/books\/introduction-business\/pages\/a-understanding-the-legal-and-tax-environment[\/footnote] The government pursues businesses that use their substantial market power to engage in anticompetitive behavior.\r\n<h3>Clayton Act<\/h3>\r\nPassed by Congress and signed into law in 1914, the Clayton Antitrust Act was designed to clarify and strengthen the Sherman Act. The Clayton Act specifically outlawed:\r\n<ul>\r\n \t<li><strong>Price discrimination<\/strong>. Offering a customer discounts that are not offered to all other purchasers buying on similar terms<\/li>\r\n \t<li><strong>Exclusive dealing<\/strong>. Refusing to let the buyer purchase a competitor\u2019s products for resale<\/li>\r\n \t<li><strong>Tying contracts<\/strong>. Requiring buyers to purchase merchandise they may not want in order to get the products they do want<\/li>\r\n \t<li><strong>Purchase of stock in competing corporations so as to lessen competition<\/strong>. Buying competitors\u2019 stock in such quantity that competition is reduced<\/li>\r\n<\/ul>\r\nIn addition, the Clayton Act established the legality of strikes, boycotts and labor unions.[footnote]\"The Clayton Antitrust Act.\" US House of Representatives: History, Art &amp; Archives. Accessed June 12, 2019. <a href=\"https:\/\/history.house.gov\/HistoricalHighlight\/Detail\/15032424979\" target=\"_blank\" rel=\"noopener\">https:\/\/history.house.gov\/HistoricalHighlight\/Detail\/15032424979<\/a>[\/footnote]\r\n<h3>Federal Trade Commission Act<\/h3>\r\nThe Federal Trade Commission Act, also passed in 1914, bans unfair trade practices. This act created the Federal Trade Commission, an independent five-member board with the power to define and monitor unfair methods of competition, such as those prohibited by the Sherman and Clayton Acts. The FTC investigates complaints and can issue rulings called cease-and-desist orders to force companies to stop unfair business practices. Its powers have grown over the years. Today the FTC is one of the most important agencies regulating the competitive practices of business. For example, as of 2022, the FTC is pursuing a case against Facebook alleging that it illegally obtained a monopoly in social networking when it acquired Instagram and WhatsApp.[footnote]Kang, Cecilia. \u201cA Facebook Antitrust Suit Can Move Forward, a Judge Says, in a Win for the F.T.C.\u201d The New York Times, January 11, 2022. https:\/\/www.nytimes.com\/2022\/01\/11\/technology\/facebook-antitrust-ftc.html[\/footnote]\r\n\r\nIn addition to these federal statutes, most states have antitrust laws that are enforced by state attorneys general or private plaintiffs. Many of these statutes are based on the federal antitrust laws.\r\n\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"350\"]3896[\/ohm2_question]<\/section>","rendered":"<h2>Antitrust Regulation<\/h2>\n<p>The goal of <strong>antitrust legislation<\/strong> is to create and maintain a competitive market that results in lower prices, higher quality, more choice, and more innovation. The mission of the Federal Trade Commission (FTC) and the U.S. Department of Justice Antitrust Division, is to enforce antitrust laws which support a competitive marketplace. Three pieces of legislation serve as the core of federal antitrust laws.<\/p>\n<h3>Sherman Act<\/h3>\n<p>The first act regulating competition was the Sherman Antitrust Act, passed in 1890 to prevent large companies from monopolizing, or dominating, an industry and making it hard for smaller firms to compete.<a class=\"footnote\" title=\"OpenStax.org. \u201cA Understanding the Legal and Tax Environment - Introduction to Business | OpenStax.\u201d Accessed December 4, 2022. https:\/\/openstax.org\/books\/introduction-business\/pages\/a-understanding-the-legal-and-tax-environment\" id=\"return-footnote-2909-1\" href=\"#footnote-2909-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a> The government pursues businesses that use their substantial market power to engage in anticompetitive behavior.<\/p>\n<h3>Clayton Act<\/h3>\n<p>Passed by Congress and signed into law in 1914, the Clayton Antitrust Act was designed to clarify and strengthen the Sherman Act. The Clayton Act specifically outlawed:<\/p>\n<ul>\n<li><strong>Price discrimination<\/strong>. Offering a customer discounts that are not offered to all other purchasers buying on similar terms<\/li>\n<li><strong>Exclusive dealing<\/strong>. Refusing to let the buyer purchase a competitor\u2019s products for resale<\/li>\n<li><strong>Tying contracts<\/strong>. Requiring buyers to purchase merchandise they may not want in order to get the products they do want<\/li>\n<li><strong>Purchase of stock in competing corporations so as to lessen competition<\/strong>. Buying competitors\u2019 stock in such quantity that competition is reduced<\/li>\n<\/ul>\n<p>In addition, the Clayton Act established the legality of strikes, boycotts and labor unions.<a class=\"footnote\" title=\"&quot;The Clayton Antitrust Act.&quot; US House of Representatives: History, Art &amp; Archives. Accessed June 12, 2019. https:\/\/history.house.gov\/HistoricalHighlight\/Detail\/15032424979\" id=\"return-footnote-2909-2\" href=\"#footnote-2909-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a><\/p>\n<h3>Federal Trade Commission Act<\/h3>\n<p>The Federal Trade Commission Act, also passed in 1914, bans unfair trade practices. This act created the Federal Trade Commission, an independent five-member board with the power to define and monitor unfair methods of competition, such as those prohibited by the Sherman and Clayton Acts. The FTC investigates complaints and can issue rulings called cease-and-desist orders to force companies to stop unfair business practices. Its powers have grown over the years. Today the FTC is one of the most important agencies regulating the competitive practices of business. For example, as of 2022, the FTC is pursuing a case against Facebook alleging that it illegally obtained a monopoly in social networking when it acquired Instagram and WhatsApp.<a class=\"footnote\" title=\"Kang, Cecilia. \u201cA Facebook Antitrust Suit Can Move Forward, a Judge Says, in a Win for the F.T.C.\u201d The New York Times, January 11, 2022. https:\/\/www.nytimes.com\/2022\/01\/11\/technology\/facebook-antitrust-ftc.html\" id=\"return-footnote-2909-3\" href=\"#footnote-2909-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a><\/p>\n<p>In addition to these federal statutes, most states have antitrust laws that are enforced by state attorneys general or private plaintiffs. Many of these statutes are based on the federal antitrust laws.<\/p>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm3896\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=3896&theme=lumen&iframe_resize_id=ohm3896&source=tnh&show_question_numbers\" width=\"100%\" height=\"350\"><\/iframe><\/section>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-2909-1\">OpenStax.org. \u201cA Understanding the Legal and Tax Environment - Introduction to Business | OpenStax.\u201d Accessed December 4, 2022. https:\/\/openstax.org\/books\/introduction-business\/pages\/a-understanding-the-legal-and-tax-environment <a href=\"#return-footnote-2909-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-2909-2\">\"The Clayton Antitrust Act.\" US House of Representatives: History, Art &amp; Archives. Accessed June 12, 2019. <a href=\"https:\/\/history.house.gov\/HistoricalHighlight\/Detail\/15032424979\" target=\"_blank\" rel=\"noopener\">https:\/\/history.house.gov\/HistoricalHighlight\/Detail\/15032424979<\/a> <a href=\"#return-footnote-2909-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-2909-3\">Kang, Cecilia. \u201cA Facebook Antitrust Suit Can Move Forward, a Judge Says, in a Win for the F.T.C.\u201d The New York Times, January 11, 2022. https:\/\/www.nytimes.com\/2022\/01\/11\/technology\/facebook-antitrust-ftc.html <a href=\"#return-footnote-2909-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":21,"menu_order":28,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Antitrust Legislation\",\"author\":\"Nina Burokas\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc-attribution\",\"description\":\"Understanding the Legal and Tax Environment\",\"author\":\"\",\"organization\":\"OpenStax\",\"url\":\"https:\/\/openstax.org\/books\/introduction-business\/pages\/a-understanding-the-legal-and-tax-environment\",\"project\":\"Introduction to Business\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":2878,"module-header":"learn_it","content_attributions":[{"type":"original","description":"Antitrust Legislation","author":"Nina Burokas","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"cc-attribution","description":"Understanding the Legal and Tax Environment","author":"","organization":"OpenStax","url":"https:\/\/openstax.org\/books\/introduction-business\/pages\/a-understanding-the-legal-and-tax-environment","project":"Introduction to Business","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2909"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":10,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2909\/revisions"}],"predecessor-version":[{"id":5338,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2909\/revisions\/5338"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/2878"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2909\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=2909"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=2909"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=2909"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=2909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}