Asked by Thamizh Ezhilnambi on Jul 08, 2024

verifed

Verified

How effective have antitrust laws been in breaking up existing monopolies?

Antitrust Laws

Legislation intended to promote competition and prevent monopolies by regulating corporate behaviors and practices.

Monopolies

Market structures characterized by a single seller controlling a large portion of the market and limiting competition.

Breaking Up

In a business context, refers to the action of dissolving, restructuring, or splitting a company or organization into smaller units.

  • Evaluate the effectiveness of antitrust laws in preventing and breaking up monopolies.
verifed

Verified Answer

SD
Stephanie DominguezJul 12, 2024
Final Answer :
Citing the rule of reason, the government has generally been lenient in applying antitrust laws to monopolies that have developed naturally. Generally, the federal government will sue a firm only if it has a very high market share and there is evidence of abusive conduct in achieving, maintaining, or extending its market dominance. Even if the federal government wins the antitrust lawsuit, there is still the matter of remedy: What actions should the court order to correct the anticompetitive practices of the monopoly that lost the lawsuit? As part of an out-of-court settlement between the government and AT&T, in 1982 AT&T agreed to divest itself of its 22 regional telephone-operating companies. In 2000, a lower court ordered that Microsoft be split into two competing firms. A court of appeals upheld the lower-court finding of abusive monopoly but rescinded the breakup of Microsoft. Instead of a structural remedy, the eventual outcome was a behavioral remedy in which Microsoft was prohibited from engaging in a set of specific anticompetitive business practices.