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ANTITRUST LAWS FOR FAIR MARKET COMPETITION

We’ve heard a lot about unfair trade policies coming from large sugar and glucose companies. Also,  the additives market has been affected by a downpour of Asian Synthetics at a “killing”price.  The situation might change.

Antitrust laws regulate competition between companies.

They protect consumers from price gouging and unfair competition by making sure trade remains unrestrained. When businesses conspire to tilt competition in their favor, they’ve violated antitrust laws.

A monopoly exists when one company is the sole provider of a good or service in an industry. This makes it nearly impossible for others to enter the market, and consumers have fewer choices and higher prices. Antitrust laws can penalize that company, or even break it up.

Antitrust laws are also applied to other suspect business activities, including market allocation, bid rigging and price fixing.

Suppose ABC and XYZ corporations are the only widget producers in the state. They split the market in half and sell their products at high prices while staying out of each other’s territory. Other businesses cannot enter the competition. This is market allocation.

Bid rigging occurs when ABC, XYZ and PDQ corporations agree to act together as a single producer to influence prices. They take turns bidding low on projects to make sure they control all business, and keep competitors out.

Price fixing occurs if ABC and XYZ are the only widget producers, and they conspire to sell their products at the same high price. If their widgets are of equal quality, consumers have no choice and higher costs.

 

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