Do Antitrust Laws Hinder Businesses?

Antitrust Laws

Antitrust laws are an important part of America’s law history. They ensure that fair competition exists in an open-market economy and, when used correctly, they help everyone and stimulate a healthy economy. However, antitrust laws were created for an economic system that is pure and perfect all the time, an unrealistic expectation of our current structure. So while antitrust laws do some good things for companies and consumers alike, they can also hurt the very businesses such laws were created to protect.

Antitrust laws were established to promote and protect the competition that is the root of the United States’ economic standing. When the laws were made, their creators assumed that a free and unregulated market would give rise to coercive monopolies, businesses operating in a field where other competitors aren’t allowed to join. In some cases, antitrust laws do protect businesses, like when the laws lead to price fixes that guarantee better income for independent workers.

However, coercive monopolies can’t be created in a free economy like ours because they can only be realized by acts of government like special regulations, subsidies, or franchises, making it quite difficult for businesses to collaborate and work together. For example, a recent study indicates that antitrust laws are hurting the efforts of businesses who want to work together on sustainable, socially-responsible business practices but are afraid of overstepping antitrust laws and being penalized for it.

Because our economic environment has changed so much since the conception of antitrust laws, they risk becoming outdated in the face of current global concerns like climate change.

“We are so deeply rooted in our assumptions about markets and competitions,” says Inara Scott, attorney and assistant professor at Oregon State University’s College of Business. “It is very hard to challenge [those assumptions]. But these laws were written at a time when resources seemed inexhaustible, whereas today we live in an era of limited resources.”

With limited resources, it matters who’s doing business and how. But if new companies can’t break into a monopolized field, business, competition, and the national economy will suffer. Legal barriers often prevent the expansion of ideas and markets, and they reduce spread of information people need to make informed decisions about how what businesses they want to work with.

Without competition, our economy won’t grow. But antitrust laws do offer some necessary protections to certain fields and companies. Perhaps the best thing to do is to revise when and how antitrust laws work and refresh their regulations in light of our nation’s changes, challenges, and interests.