The US Laws and Guidelines Governing Fair and Equitable Business Practices

Topics: Competition law, Cartel, Monopoly Pages: 5 (847 words) Published: July 13, 2014

The US Laws and Guidelines Governing Fair and Equitable Business Practices BUSN115
September 21, 2013
Professor Neal McGregor
The US Laws and Guidelines Governing Fair and Equitable Business Practices The United States became one of the most influential world powers virtually overnight. The system of functionality which maintains this growth and power is the refined codes of business practices which are the cornerstone for domestic and international business relations the world over. Due to the unprecedented growth and prosperity of our nations economy and government, many countries look to us as a model of free enterprise for other nations. One doctrine of thought is the United States belief that our government functions best when it leaves the fate of businesses to either succeed or fail on their own, through influence of regulation to assist in the overall success of the business, but, leaving it up to the business owner/s to fairly practices these guidelines to ensure that all parties involved in the business have equal opportunity for growth. The other doctrine of thought is the belief that the government functions best on a system of assistance toward publically and privately owned companies and that the sole function of the government is to ensure the care and prosperity of its citizens. With either of these thought practices, the functionality of the United States economy as a whole relies solely on regulations from the government to ensure fair practices. A complex web of government regulations has been put in place to ensure fair business operations. Just like the IRS comes out with a wide array of new regulations every year to ensure the tax laws continually evolve, so does the government come out with thousands of new pages of regulations to communicate to businesses the ins and outs of what US businesses can and cannot participate in.

One system of laws, which defines the government’s role in fair and equitable business practices, is to allow for appropriate competition between businesses to ensure growth and innovation as long as one company does not monopolize a particular industry. One great example of this type of relationship is the two businesses Macintosh and Windows. Historically they have always been in constant competition with one another, which has ultimately benefitted the people of the world by fueling competitive innovation. [1] “National competition law usually does not cover activity beyond territorial borders unless it has significant effects at nation-state level.”

One law, which helps protect businesses and promotes fair competition for the benefit of the consumers, is the US Anti-Trust law. This law is comprised of three different acts: The Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. The first role these acts perform is to restrict the formation of cartels which would perform outside of the guidelines of the government and there for not be bound by there laws. The second role these acts perform is to ensure no single business entity can perform a certain level of mergers and acquisitions, which would essentially turn them into a monopoly and reduce competition. Overall, the antitrust laws are constantly debated for their overall functionality and efficiency in protecting the fair business practices of the United States. [2] “One view, mostly closely associated with the "Chicago School of economics" suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while a broad range of legal and economic theory sees the role of antitrust laws as also controlling economic power in the public interest.”

Some practices are considered so detrimental to fair business practices, that they are immediately considered unlawful. One of the restrictive practices the government frowns upon is price fixing. Price fixing is the method by which a company monopolizes the overall cost of a product...

References: [1] Taylor, Martyn D. (2006). International competition law: A new dimension for the WTO?.
Cambridge University Press. p. 1. ISBN 978-0-521-86389-6.
[2] Herbert Hovenkamp, 'Chicago and Its Alternatives ' (1986) 6 Duke Law Journal
1014–1029, and RH Bork, The Antitrust Paradox (Free Press 1993)
[3] Addyston Pipe and Steel Co. v. United States: 175 U.S. 211 (1899)
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