What is an Antitrust Policy?

An antitrust policy is designed to affect competition. The general goal behind such a policy is to keep markets open and competitive. These regulations are used by different governments around the world, although the laws often vary.

In most countries, antitrust policies are written into law. In the United States, they are mainly handled by the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice. The FTC mainly deals with issues of consumer protection while the Antitrust Division is generally responsible for criminal violations of an antitrust policy.

Most countries do not have two regulatory bodies as is seen in the US. In Europe, for example, the Competition Directorate is the sole government body that generally handles an antitrust policy. It is common throughout the world for disputes regarding these policies to be handled by a judicial body.

In the United States, the ideas for such policies began after the Civil War when large trusts began to emerge in important industries such as petroleum and cotton. Concerns of abuse led to the first antitrust policy, known as the Sherman Act. This piece of legislation declared that actions that restrain trade or create monopolies are anticompetitive and therefore illegal.

Anti-trust law continued to be developed over the next century. Landmark legislation was passed during this time. In 1914, the Clayton Act became law. This made certain types of mergers illegal and granted certain regulatory powers to the Executive branch. To balance that power, Congress also created the FTC.

When an antitrust policy is made or when a violation is accessed there are usually two things to consider — the public interest and the interest of the economy. In the US, assessments are often based on a standard of reasonability. There is often a great deal of debate over what standards are used to determine when an action is unreasonable. Per se rules are also used, which deem certain practices illegal based on their face value. The mode of analyzing an antitrust policy and potentially violating actions is also a matter of great debate.

Antitrust polices are not only restricted to competition within a nation. Enforcing violations is however more difficult when a lawbreaker is in another nation. In many cases, enforcement is only successful if a degree of cooperation is displayed between the nation that claims to be violated and the nation that hosts the violating party.