US Antitrust Laws: A Primer

Abstract

US antitrust laws, broadly speaking, aim to curb efforts by firms to reduce competition in the marketplace or to create or maintain monopolies. These laws proscribe certain mergers and business practices in general terms, leaving courts to decide in specific terms which mergers and practices are illegal based on the facts of each case. Courts have applied the antitrust laws to changing markets, from a time of horses and buggies to the present digital age.

Yet for many years, US antitrust laws have had the same basic objective: to protect the process of competition for the benefit of consumers, making sure that businesses have strong incentives to operate efficiently, keep prices down, and keep quality up. Though imperfect in application (like all legal institutions), the modern consumer-welfare approach to antitrust law has served the American public well.

Before turning to antitrust enforcement practicalities, the evolution of American antitrust enforcement, and very recent controversies that have called into question the appropriateness of contemporary antitrust policy, I begin with a brief review of the key federal antitrust laws.

Keywords: anti-trust law, competition, Sherman Act, Federal Trade Commission Act, Clayton Act, FTC, Cartwright Act, Louis Brandeis

JEL Classification: K21, L40, K00