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What is antitrust policy? How do these laws represent social and economic policy?
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Business and Its Environment
Edition: 7th
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Antitrust policy is an amalgam of social policy, economics, law, and administrative practice. Antitrust acts were a result of the political pressure from farmers and others concerned about railroad cartels, the railroads' pricing practices, and the distribution of power between farmers and railroads. The laws thus represent both social and economic policy.
As social policy, the antitrust laws express concern about concentrations of economic power and the potential for abuse inherent in that concentration. This parallels the concern about the concentration of political power and the preference for its dispersion in the electorate and among the institutions of government. Just as the Constitution controls political power through checks and balances among the branches of government and through popular elections, antitrust policy focuses on controlling economic power.
Antitrust policy also reflects economic policy. The basic objective is to protect competition and by doing so to benefit consumers. Antitrust thus is concerned with the structure of markets, the conduct of market participants, and the resulting performance of those markets. Protecting competition does not mean protecting competitors; vigorous competition can result in firms being driven from the market. Moreover, practices that may appear to be anticompetitive must be evaluated in terms of their effects on consumers. Antitrust economics has both a theoretical and an empirical component.
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