A Comparison Of Legal And Illegal Monopolies&nbspEssay

PARAGRAPH FROM Essay :

Illegal Restraints of Trade: Legal Monopolies in the United States

Several federal laws prohibit the formation and operation of monopolies in the United States at present. The laws against monopolies are intended to prevent these types of business entities from dominating a given market by eliminating all competition, typically to the detriment of consumers. Moreover, monopolies are also characterized by lower-quality products and services and they tend to discourage innovation in ways that are also detrimental to consumers. Against this backdrop, it is reasonable to question why some legal monopolies are still allowed to exist in the United States today. To help answer this question, the purpose of this paper is to provide a review of the relevant literature concerning legal monopolies in the United States today, including the controlling federal legislation as well as their advantages and disadvantages. Finally, the paper presents a summary of the research and important findings concerning legal monopolies in the United States.

Review and Discussion

According to the definition provided by Blacks Law Dictionary (1990), a monopoly is a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right (or power) to carry on a particular business or trade, manufacture a particular article, or control the sale of the whole supply of a particular commodity [or] a form a market structure in which one or only a few firms dominate the total sales of a product or service (1007). It is important to note, though, that monopolies have not always been illegal in the United States, but the social and economic harm that these businesses entities can cause resulted in growing calls for the federal government to take action towards the end of the fin de sicle and shortly thereafter. For instance, in 1890, the U.S. Congress enacted the Sherman Act as a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade as well as two additional antitrust laws, the Federal Trade Commission Act (which authorized the creation of the Federal Trade Commission) and the Clayton Act, both of which were enacted into law in 1914 (Antitrust Laws 2021).

These three federal laws were directly intended to address the several monopolies that were dominating some of the industrial sectors in the United States at the time. For instance, according to the rationale provided by Milun, At the beginning of the…(MLB) only enjoys a monopoly without limit within the strict parameters of the unique business of baseball and the MLB is not authorized to restrain trade in all of the sectors in which it competes (Lucas 1537). Likewise, concessionaire operations at all U.S. national parks are legal monopolies. In this regard, the Concessions Policy Act of 1965 removed all competition from park concessionaire contracts and . . . enacted into law perpetual monopolies in our national parks (Keeffe 979). In other words, some specialized types of businesses are allowed to operate monopolies provided that it is in the best interests of the nation and that such operations do not restrain trade in other sectors.

Conclusion

The research showed that the Sherman Act, Federal Trade Commission Act and the Clayton Act are the key pieces of federal legislation which outlaw most monopolies in the U.S. at present. The research was also consistent in showing that these laws exist in order to protect consumers from the price-fixing, substandard quality and lack of incentives for innovation that characterize monopolies. Interestingly, though, some business entities, including major sports corporations and even concession services for National Parks, are allowed to operate as monopolies provided that they do…

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