Competition Legal Environment

CSR The economic system of the United States is based on the fundamental principle that the free market, with limited government intervention, is the most efficient economic system. Free markets do a better job of creating and distributing wealth than other economic systems. Yet, there still needs to be some government influence on the markets because only government can serve as a counterweight to business, to protect the interests of both consumers and investors. It is along these lines that most government regulation of business exists.

There are a couple of key classes of laws that the U.S. has to further a balanced, fair and competitive economic system. The first of these are the antitrust laws, another class is securities laws and there is also a section of basic criminal law that deals with business as well. This paper will explore the legal environment in the context of promoting competitive markets.

Antitrust Legislation The rise of monopolies in the late 19th century led to uncompetitive business practices on the part of companies that were in monopoly or near-monopoly positions. This gave rise to a particular government respond, antitrust legislation. The first such law was the Sherman Act of 1890, and this has been bolstered by several subsequent laws. The Federal Trade Commission Act in 1914 created the FTC, which is the enforcement body for anticompetitive practices.

The FTC works with the Department of Justice in order to enforce the laws regarding monopoly and other uncompetitive abuses by businesses in dominant positions. Another major law in 1914 was the Clayton Act, which remains in force to this day (FTC, 2014). For example, mergers and acquisitions must be approved by the authorities to ensure that markets remain competitive both in terms of product/service markets and in regional areas as well.

The preservation of competition is a benefit to free markets, despite the occasional need for government intervention to enforce the preservation of competition. Securities Laws A free market benefits strongly from having free and open capital markets that bring together those with capital and those who need capital to invest in their businesses. To that end, there are a number of securities laws to ensure that America's capital markets function well, have integrity, and this encourages investors to make their capital available to firms in need of it.

The most basic of these laws are the Securities Act of 1933, the Securities Exchange Act of 1934, and now the Sarbanes-Oxley Act of 2002. These laws govern how securities markets within the U.S. function, and they create the Securities Exchange Commission as the primary enforcement body for securities laws (SEC.gov, 2014). Other Laws There are other laws within the bounds of criminal law that seek to enforce efficient, trustworthy and competitive markets. U.S. Code Chapter 47, for example, outlines different types of fraud that are illegal.

Typically, there are a number of bodies that can investigate fraud, depending on the type of the fraud and its amount. The SEC might investigate a Ponzi scheme like Bernie Madoff, but other forms of fraud might be subject to criminal investigation at a more local level, or even the FBI level (Lenzner, 2008). Such laws seek to ensure that when firms compete, they do so fairly, and do not compete by seeking to destroy their competition through illegal means.

Analysis In general, these laws have created a robust, competitive market economy in the United States. There are legal issues that emerge every day. This does not mean that the system is broken; in fact it means the opposite. The system works, and when companies are found to be doing things illegal, action is taken to stop them, prevent further action and provide remedy to those who have been wronged.

The United States has the world's largest capital markets, the largest economy and is consistently rated as one of the best countries in the world in which to do business. All of these things are possible because of the laws and the robust system of enforcement that ensures that firms are competing fairly on their own skills and merits. This forces companies to succeed through things like innovation, and that has made the U.S. economy the most innovative in the world.

There is little doubt that the legal environment is one of the major strengths in American business. It actually makes little sense when you hear people who are.