Antitrust: Cartel and Federal Trade Commission Essay

1196 Words Jan 7th, 2014 5 Pages
Research Paper – Antitrust

The purpose of this paper is to discuss antitrust law with regard to federal regulations. In the form of a case study, this paper will examine the legal obstacles faced by the merger proposal between US Airways Group Inc. and American Airlines' parent corporation AMR. The focus of the paper is to examine the legal hurdles posed by antitrust laws used to block the merger and then briefly explore possible ethical issues associated with allowing US Airways Group Inc. and AMR to merge.
Antitrust Laws
There are three core federal antitrust laws in effect today in our US legal system. They are the Sherman Act, The Federal Trade Commission Act, and the Clayton Act
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The Enforcers
The federal antitrust laws are enforced by the Federal Trade Commission and the U.S. Department of Justice. They both open up and conduct antitrust investigations. In situations involving the airline industry the Department of Justice has jurisdiction in matters pertaining to antitrust laws. There are other regulatory agencies that also must give approval before certain mergers can take place. In these instances The Federal Trade Commission and the Department of Justice provide support to the agencies. Individual states may also work in conjunction with the two federal agencies to enforce its state's antitrust laws. Additionally, the states can file antitrust lawsuits on behalf of its citizens or the state. This is usually done through the state's attorney general office. Individuals and businesses can also initiate antitrust complaints and file suits to have the antitrust laws enforced ("The federal government", n.d.).
Section 7 of the Clayton Act addresses the antitrust laws concerning mergers. Mergers are not inherently bad or illegal. So long as the merger doesn't cause a significant increase in prices, a serious reduction in quality of goods and services, and doesn't deter innovation. Mergers become a problem when they significantly lessen competition or lead to a

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