Antitrust laws also referred to as competition laws, are statutes developed by the U.S. government to protect consumers from predatory business practices. They ensure that fair competition exists in an open-market economy. These laws have evolved along with the market, vigilantly guarding against would-be monopolies and disruptions to the productive ebb and flow of competition. Antitrust laws are applied to a wide range of questionable business activities, including but not limited to market allocation, bid rigging, price fixing, and monopolies. Below, we take a look at the activities these laws protect against.

If these laws didn’t exist, consumers would not benefit from different options or competition in the marketplace. Furthermore, consumers would be forced to pay higher prices and would have access to a limited supply of products and services.

Market allocation is a scheme devised by two entities to keep their business activities to specific geographic territories or types of customers. This scheme can also be called a regional monopoly.  Suppose my company operates in the Northeast and your company does business in the Southwest. If you agree to stay out of my territory, I won’t enter yours, and because the costs of doing business are so high that startups have no chance of competing, we both have a de facto monopoly.

In 2000, the Federal Trade Commission (FTC) found FMC Corp. guilty of colluding with Asahi Chemical Industry to divide the market for microcrystalline cellulose, a primary binder in pharmaceutical tablets. The Commission barred FMC from distributing micro-crystalline cellulose to any competitors for 10 years in the United States, and also banned the company from distributing any Asahi products for five years.1