Preventing Antitrust Violations – How Governments Can Prevent Them

Prof. Fiona Scott Morton, former chief economist for the Justice Department’s Antitrust Division and the founder of the Thurman Arnold Project at Yale, explains why antitrust violations are bad for consumers and what can be done to correct it.

She explains that these laws prevent companies from doing three things. One, they forbid collusion where firms might together decide they are all going to charge the same amount instead of setting their own prices and competing with each other. Two, they forbid anti-competitive mergers, which means companies lessen their competition by trying to buy their direct competitor and control pricing and quality. Three, they forbid monopolization, where a large firm or one with market power tries to push out a competitor. Antitrust violations are bad for consumers, but the government can fix it.