U.S. Antitrust Laws and Your Business
By
Trina Schiller
I have been a member of iCop for a long time now. One of my
favorite benefits of membership is reading Jill. Scott's "Internet Marketing
Trade Journal." She really puts out a great ezine.
Anyhow ... The reason I mention the Trade Journal is because
of an article I recently read there. This article was about antitrust laws, and
I learned a thing or two from it. Furthermore, it prompted me to do some
investigating on my own, and I'd like to share that information with you.
Antitrust laws were created to promote competition in
business. Competition is a very positive thing for the consumer. Competition in
business, allows for the consumer to shop around for the best product at the
best price. Without competition in business, we, as consumers would be at the
mercy of manufacturers, and would stuck paying top dollar for everything.
Remember when AT&T was the only telephone service? The government stepped in
and broke up their monopoly on communication services, to allow other companies
to offer services at a competitive rate. Now we have more communication options,
and can shop for the best one based our needs and budget.
However, antitrust laws are not just applicable to big corporations. These
laws apply to anyone selling anything, including Internet marketers.
The application of these laws covers quite a few areas, here are just a few:
Price fixing
Restricting Output
Market division
Boycotts
Restricted advertising
Tie-in sales
Price Fixing - Agreements made between competitors to maintain a specific
price, or credit terms, on a product or service. Blatant price fixing is subject
to criminal prosecution.
What this means is that if I am selling a product and offer resale rights to
it, I cannot dictate to the reseller at what price they can sell it for. The
best I can do is to list a MSRP (manufacturer suggested retail price). I have to
allow the reseller to compete with my price. If the reseller wants to sell the
product for 2 cents less than what I am selling it for, they have the right to
do that.
Market division - This refers to competitors lining out market territories.
They agree to split the market and each work a predetermined share of it,
locking out others not participating in the agreement. This type of joint
venture is illegal.
Boycotts - This situation occurs when competitors agree not to do business
with specific other persons or businesses, forcing another to pay an inflated
price.
For example: Let's say that I manufacture lawn mowers. I work a deal with my
engine supplier to get a discount on engines for my mowers, which is less than
his competitor sells them for. Then I get my engine supplier to boycott my
competitor, forcing him [my competition] to buy his engines at a higher price,
resulting in my competitor's mowers costing the consumer more to buy than mine.
Restricted advertising - "Restrictions on price advertising can be illegal if
they deprive consumers of important information. Restrictions on non-price
advertising also may be illegal if the evidence shows the restrictions have
anticompetitive effects and lack reasonable business justification. The FTC
recently charged a group of auto dealers with restricting comparative and
discount advertising to the detriment of consumers." http://www.ftc.gov/bc/compguide/illegal.htm
Tie-in sales - This is when the condition of sale for one product, or service
requires the purchase of another, which may, or may not be desirable to the
consumer, or which can be purchased elsewhere for less.
These are just a few examples of antitrust law applications. I picked these
to share with you for a specific reason. That reason being; many Internet
marketing gurus are in violation of these laws on a regular basis. They refer to
it as joint venturing.
Whether or not they knowingly violate these laws is a matter of speculation.
Perhaps gurus don't know everything. Perhaps they don't know that limiting the
supply of a product, to drive up the price, is illegal. (How many gurus can you
think of that have been doing that lately?)
At least now you know these things.
For more information on U.S Antitrust Law
http://www.ftc.gov/bc/compguide
Copyright © 2005
The Trii-Zine Ezine
http://www.ezines1.com
Trina L.C. Schiller
About the Author: Publisher/ Home Business Owner
http://www.trinaschiller.ws
Article Source: http://EzineArticles.com/
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