• Antitrust/Competition Law: Prevents collusion, established in the U.S. by Sherman and Clayton Acts
• Major Antitrust Cases: Microsoft, Whole Foods
• Country Comparison: US system emphasizes competition, Europe and Japan gives credit to collaboration

Antitrust/Competition Law

• Antitrust laws, known in Europe as competition laws, prohibit collusion between market participants for the purpose of preserving competitive markets and protecting consumers.
• To establish the terms by which companies can compete on equally and produce fair returns for everyone, the Sherman Antitrust Act of 1890 and The Clayton Act of 1914 were enacted. The former criminalized activities such as price fixing and market monopolization while the latter gave the government the authority to supervise mergers and acquisitions of large corporations where the effect may substantially lessen competition.

Major Antitrust Cases

• One of the most high profile antitrust suits involved 19 states and the Federal Justice Department that accused Microsoft of monopolistic business practices by excluding a competing browser, Netscape, by bundling its own browser, Internet Explorer with Windows operating system. In the United States v Microsoft the company was forced to split into separate units, though this ruling was partially overturned in an appeal.
• In 2007, the Federal Trade Commission brought a lawsuit against the natural foods giant Whole Foods for its attempt to acquire its competitor, Wild Oats, accusing Whole Foods of reducing competition in the natural and organic foods markets. As of August 2007, a Federal court has delayed the acquisition (Source: The New York Times).

Country Comparison

• The United States has a strong antitrust system which, as with all "liberal market economies", emphasizes the principal of competition. This assumes that competition is the driving force behind innovation and economic success because it empowers consumers to support the best companies and allows bad companies to die out.
• In comparison to the competition-oriented system that dominates the U.S. regulatory regime, coordination between firms and financial institutions is common in Europe and Japan. Competition is still a necessary element in European and Asian markets, but inter-firm collaboration is built into the unique political-economic structures of these regions because of its proven ability to generate favorable economic outcomes. Coordinated market economies undermines the assumption that pure competition is best for the entrepreneur and necessary for economic success.