Articles

Enforcing Anti-Trust Laws, What a Novel Idea

In economics/money, industry excesses, legal issues/law/courts, U.S government on May 12, 2009 by Editor Z

The new head of the U.S Justice Department announced that it will break with efforts to end the devitalizing of U.S anti-trust laws, where large defendants who are accused of unfair and unethical business practices and pose a hazard to the legitimate free market; are insulated from the complaints registered by plaintiffs who are often smaller in size and strength.

NY TIMES:

WASHINGTON — President Obama’s top antitrust official announced on Monday that the administration would restore an aggressive enforcement policy against corporations that use their market dominance to elbow out competitors or to keep them from gaining market share.

The new enforcement policy reverses the Bush administration’s approach, which strongly favored defendants against antitrust claims. It returns to a policy that led to the landmark antitrust lawsuits against Microsoft and Intel in the 1990s.

The head of the Justice Department’s antitrust division, Christine A. Varney, announced the policy reversal in a speech on Monday before the Center for American Progress, a liberal policy research organization. She will deliver the same speech on Tuesday to the United States Chamber of Commerce.

Ms. Varney said that the Bush administration policy “lost sight of an ultimate goal of antitrust laws — the protection of consumer welfare.”

“The failing of this approach is that it effectively straitjackets antitrust enforcers and courts from redressing monopolistic abuses, thereby allowing all but the most bold and predatory conduct to go unpunished and undeterred,” she said. “We must change course and take a new tack,”

Though it is great news for those who believe in small businesses, legitimate competition that is not used to enrich economically or industrially a given company within a sector of the economy who uses intimidation and wield their power to clear the field; this problem is likely much broader then the last administration.

Now I confess (and I am fairly certain that the handful of regular readers are aware ) that I am not fluent in economics, business, or anti-trust law; however it is evident even to an eye as untrained as mine that large business has gained a stranglehold in various arenas of the economy. And its not a partisan issue. A few given companies are acquiring entities in more and more areas. It was in the 1990s with the approval of then President Clinton, that the trend of media deregulation began with the Telecommunications Act of 1996, where radio and television stations can own multiple stations in the same community. News papers have also followed suite . And then there is the credit card companies, banks, oil companies, energy companies, and agribusiness just to name a few who have used their mammoth stature to ensure that small operations don’t get a chance to become viable competitors.

But its not just monopolies that are the problem. Oligopolies, which are when not merely one entity has dominion over a market but say two, three., or four do and use their muscle to keep out smaller and often more local competition. There needs to be laws, if there aren’t already that curb that. Something of a modern day “trust busting” of these oligopolies may not be a bad idea.

To me it sounds like at least the potential of a good start.

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