Effectiveness of United States Business Practices Laws

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23 October 2015

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Effectiveness of United States Business Practices Laws


Do you think that such laws are effective?

            United States of America has some laws which are supposed to further balanced, fair and competitive business practices. The laws are basically effective because control measures meant to reinforce and foresee business practices that are fair are adhered to. With this, the determination of either success or the failure of any specific regulations or specifications can depend on the angle that you look at them from. With the anti-trust laws safeness from any form of unreasonable trade, unfair and non-competitive business acts and price discrimination are fully insured. For instance, each time new laws and regulations are initiated initial skepticism concerning their intended purpose and their impact as laws which are supposed to promote competitive and fair business practices. People may however not realize it citing an example of consumers where antitrust laws have effects on their daily life in many different ways.

            The Federal Trade Commission of the United States Act came up with a government commission which was meant to help prevent unfair come uncompetitive business practices. 2014 FDIC’s compliance Manual states that:In order to prevent deceptive, uncompetitive or unfair business practices to consumers; to facilitate informed consumer choice and public awareness of a competitive process and in order to accomplish all this having not unduly burdening legitimate business activities (FDIC, 2014).

            Many other regulations come laws have been enacted to fully protect workers and consumers (since 1930s). It’s illegal for any employer to discriminate in terms of hiring on the age, race, sex or even their religious believes. Child labor is highly prohibited. All independent labor unions are assured of total rights to bargain or even organize a strike. These laws are fully enforced to help maintain everyone’s safety and protection.

            Back in 1890, the United States Congress enacted the popular Sherman Antitrust Act which is basically a law intended to restore free enterprise and competition through breaking up of monopolies. According to the US Congress (1890), “Sherman Anti-Trust Act” illegalizes all combinations, contracts or conspiracies that may unreasonably restrain both foreign and interstate trade. This shall include agreements amongst competitors to rig bids, fix prices and allocate customers all which are considered as criminal felonies and are punishable.’’

Why are the laws effective?

            The original purpose of enacting the Sherman Antitrust Act was basically the protection of consumers from established businesses which might decide use unscrupulous ways to artificially raise prices, this may be through purposive production of few goods which do not meet the consumer demand thus automatically raise the products’ price and value. The US Justice Department states, “This law principally shows our commitment to a free market economy which there is no competition from both governmental and private restraints leads to good results for all consumers.

            The United States government has really tried in keeping the consumers and trade industries safe from unfair treatment during any business practices. In 1914 the Congress thus passed 2 more laws which were designed to reinforce the Clayton Antitrust Act Sherman, other significant business related acts. The Clayton Antitrust Act clearly defined what the components pertaining illegal restraints of trade. The International Economics Institute clearly states that: “The act illegalized price discrimination which gave some buyers advantages over others, did not allow agreements in which any manufacturer can sell only to dealer(s) who willingly agrees to never sell any of rival manufacturer’s product(s) and prohibits specific merger types or other acts that can reduce competition (U.S Congress, 1914).


            It’s always difficult to determine when one violates any of the antitrust laws. Interpretations of the laws have varied and many analysts disagree after assessing if companies have really gained much power which may interfere the market operations. The Department of Justice states, “Effective enforcement of antitrust requires huge public support. However, public ignorance and apathy can adversely weaken the enforcement antitrust even more than any other issue. A consumer or businessperson who encounters business behaviors which appears to truly violate the antitrust laws should contact with immediate effect the enforcement authorities.” Corporate arrangements and conditions that might seem to have some antitrust threats in a particular era and may as well appear as a small threat in another.

            In conclusion, whether buying a car, doing some food shopping at the grocery or downloading some new software from any site in the Internet, antitrust laws perform an important role in making sure people have full benefits of high quality goods or services at the most efficient and competitive prices. These antitrust laws achieve these targets through fostering and promotion of market competition and prevention of business practices and mergers which are not competitive. It is therefore evident that the United States has laws that are meant to further competitive, fair and balanced business practices are highly effective.


Pitofsky. E. M. (1978). Institute for International Economics. New York.

FDIC. (2014, January 5). Federal Trade Commission Act. New York. Retrieved from fdic.gov: http://www.fdic.gov/regulations/compliance/manual/pdf/VII-1.1.pdf

U.S. Department of Justice. (1997). Antitrust Enforcement and the Consumer. Washington.

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