UK Accounting Glossary
Antitrust laws are regulations enacted at the state and federal level that constrain businesses from accumulating or exerting excessive market power. Price fixing, restraint of trade, and monopolization of markets are among the business practices prohibited by antitrust laws. Contractual arrangements between buyers and sellers and collusion between competitors qualify as restraint of trade under antitrust laws. By preventing these practices, antitrust laws aim to promote fair competition and assure that the public will receive goods and services at market-determined prices. All industries, including manufacturing, distribution, transportation, and marketing, are subject to antitrust laws. Many states base their antitrust laws on the Sherman Anti-Trust Act of 1890, which established the basis for federal antitrust laws. In 1914, Congress created the Federal Trade Commission to administer and enforce antitrust laws and also passed the Clayton Act of 1914, a major set of amendments to the original statute. Congress further amended U.S. antitrust laws with the Robinson-Patman Act of 1936. The Department of Justice also has the authority to prosecute companies that break antitrust laws, and private parties are entitled to file civil lawsuits. Plaintiffs can collect triple damages if they prevail in litigation. Kodak in 1921 and 1954, Alcoa in 1937, and Microsoft in 1997 became targets of federal prosecution for violating antitrust laws.
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This glossary post was last updated: 4th February 2020.