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Antitrust is the US term for laws regulating [[anti-competitive practices]]. Named for the US “trusts” that bought up and dominated the burgeoning US railroad networks in the late nineteenth century. | [[Antitrust]] is the US term for laws regulating [[anti-competitive practices]]. Named for the US “trusts” that bought up and dominated the burgeoning US railroad networks in the late nineteenth century. | ||
Laws are different in different jurisdictions, but the general thrust is to stop companies deterring competition in a market. The [[common law]] is ideologically committed to {{author|Adam Smith}}’s | Laws are different in different jurisdictions, but the general thrust is to stop companies from deterring competition in a market. The [[common law]] is ideologically committed to {{author|Adam Smith}}’s “invisible hand”: if a market is free, it will work in everyone’s best interest and should not need a great regulation beyond the court’s sacred task of (i) enforcing the commitments merchants voluntarily make to one another in the course of commerce — contracts, in other words, and (ii) making up [[Restitution|restitutionary]], [[Tort|tortious]] and [[equitable]] principles as they go along — I mean, ''revealing immutable strands of righteousness hewn from the living jurisprudential rock of [[common law]] and [[equity]]''). | ||
Anyway, a company that has a monopoly, or a group that can act as if they have one, will tend to gouge its customers. Antitrust laws govern two types of anti-competitive behaviour: ''horizontal'' ones in restraint of trade, where firms that should be competing with each other form cartels, fix prices to undermine the beneficial effects of competition, and between them act like a single monopoly; and ''vertical'', where companies abuse a dominant position they already have in a market to force terms/prices on its suppliers and customers and keep competitors out. | Anyway, a company that has a monopoly, or a group that can act as if they have one, will tend to gouge its customers. Antitrust laws govern two types of anti-competitive behaviour: ''horizontal'' ones in restraint of trade, where firms that should be competing with each other form cartels, fix prices to undermine the beneficial effects of competition, and between them act like a single monopoly; and ''vertical'', where companies abuse a dominant position they already have in a market to force terms/prices on its suppliers and customers and keep competitors out. | ||
Competition regulators have powers to approve or prevent company mergers that would create a dominant position in a market and may require companies that have acquired a dominant position to break up. This hasn’t happened for a while, but the regulators have a newfound energy for intervening in things, and we might expect them to, er, de-fang a few tech companies if they get too big for their boots. | Competition regulators have powers to approve or prevent company mergers that would create a dominant position in a market and may require companies that have acquired a dominant position to break up. This hasn’t happened for a while, but the regulators have a newfound energy for intervening in things, and we might expect them to, er, de-fang a few tech companies if they get too big for their boots. | ||