The True Purpose of Antitrust LawThe antitrust laws are supposed to promote and protect competition. This alone is their proper purpose. They are not intended to punish big companies merely on account of their size, nor to serve as surrogate “consumer protection” laws. Most importantly, they have never been anti-market or anti-business in their underlying conception or in their implementation. On the contrary, the antitrust laws are intended to promote market economics and healthy competition in every market, while checking the abuses that sometimes arise in different markets. The idea behind these laws is that in every market there should be robust competition: If in each market there are many sellers busily competing against one another to sell a particular kind of product or service to paying customers, no one seller will be able to take unfair advantage of the buyers, but rather each seller will be obliged to offer its good or service on attractive terms, and each seller will be responsive and efficient in its dealings with buyers, who otherwise will simply turn to another, better seller. In other words, vigorous competition in any given market keeps the sellers honest, forcing them to strive continually both to improve their goods and services and to offer them on favorable terms. Customers benefit from this competition. Poorly run companies are run out of business, as they deserve to be. The better run companies, and the most honest ones too, tend to prosper. Society as a whole benefits. This is nothing other than the glory of marketplace economics working properly and rewarding each of us for our efforts, our talent, and our perseverance. The antitrust laws exist to help marketplace economics to work better. The Origins of the Antitrust Law American antitrust laws were intended to break up the enormous family “trusts” that in the late 1800s came to dominate banking, oil production, rail transport, shipping, steel production and a handful of other key industries in the United States. Many Americans resented the enormous accumulation of power and wealth that this handful of families acquired from their dominance of these key markets, and others grew alarmed that these dominant firms would abuse their market power in order to exact unfair advantages from their customers, doing so precisely because they had eliminated their rivals and now had unchecked power in the different markets that they totally controlled.
Anti-Business or Pro-Competition?
This is where the confusion arises. The antitrust laws were never intended to indulge the clamorings of anti-business populists, such as William Jennings Bryan or his socialist fellow travelers in Europe. To such populists, it was unfair that these industrial barons should have so much affluence and power, while millions of other labored in misery for a pittance, without any social protection or any prospect of improving their sorry lot in a cruel world.