Business Law Antitirust :: GCSE Business Marketing Coursework

Because the field of Business Law is so great, this paper will examine a single aspect of Business Law, that of antitrust action. Specifically, as it is applied to Microsoft, antitrust litigation is raising eyebrows in both the legal and business worlds. There is a hue and cry that antitrust laws as they exist today have outlived their usefulness when applied to cyber commodities and artificial intelligence. This paper will present those opposing viewpoints and attempt to answer the question: are laws wrought in the industrial age applicable to today’s technology? And if so, is the antitrust challenge to Microsoft the tip of the iceberg in Business Law reformation? Antitrust Law Antitrust law attempts to ensure that market competition is protected from an organization or cartel with a monopoly on a given product. Much of antitrust enforcement tries to create a balance between the benefits of coordination and consolidation, such as efficiencies that reduce price or improve quality, and the detriments of market power that can lead to higher prices or reduced innovation. Corporate trusts grew rapidly in the US from 1880 to 1905, creating the atmosphere for President Theodore Roosevelt to launch his now famous trust busting campaigns. The era of antitrust legislation stems from the Sherman Act of 1890. The antitrust laws were based on the constitutional power of Congress to regulate interstate commerce. It declared illegal every contract, combination, or conspiracy in restraint of interstate and foreign trade. The Sherman Act makes monopolization illegal. The two elements of monopolization are: "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of the power as distinguished from growth or development as a consequence of a superior product, business acumen, or historical accident." 1 The Sherman Act was designed to eliminate restraints on trade and competition. It is the main source of antitrust law. While the Sherman Act provided protection against monopolies, Congress determined that it wasn’t quite comprehensive in its’ self. It was supplemented in 1914 by the Clayton Antitrust Act, which prohibited exclusive sales contracts, inter-corporate stockholdings, and unfair price-cutting to freeze out competitors. The Clayton Act of Seal Straugh 1914 makes price discrimination illegal, forbids tying arrangements involving only goods and makes anti-competitive mergers and acquisitions illegal. The Sherman and Clayton Antitrust Acts were made to promote competition between companies making similar products.