Antitrust

The word is synonymous with free market and trade. Since times immemorial the man has been trying to subjugate other men and acquired kingdoms. The conquest was followed by the exchange of ideas and goods which was followed by trade. The private entrepreneurship has been very important in promoting competition and free spirit in the economy. Prior to the rise of the global economy the countries were pretty much closed and protective about their economical development. The foreign capital was actively discouraged and the domestic private business was given preference to develop the local industrial base. This actually benefitted a few section of people who did their best to prevent competition among each other.

They in turn formed groups or cartels to increase the price of their goods and maximize the profit because the competition was not there. It led to the increase in the monopoly of a single company and thereby harms the industry. There were a lot of cases wherein the companies established monopoly over several decades and as a result the quality of the goods became shoddy and \people were forced to buy from the same company in the absence of the competition. The Antitrust laws passed by different countries are in fact used to force the company not to establish monopoly. The AT&T wanted to establish the monopoly in the telecommunication industry but the U.S government prevented it in doing so. The monopoly is bad for any industry. Let us take the example of the computer industry. There are innumerable manufacturers in this industry and they compete with each other for the market place. No single company is able to monopolize this industry as a result this industry carries maximum innovation and the products are cheaper and getting better day by day.

Talking about the global economy the scenario has undergone a paradigm shift and people are able to see the benefits of the competition. The increased foreign exposure to the domestic industries made them more competitive on a global scale. As a result we have an amazing array of products accompanied with a wonderful after sales service. There have been reports of monopolistic practices by some world corporations but the antitrust laws have been made on a global scale and they take care of the problem effectively. In India the directive principles have the provision of not allowing the companies to follow the monopolistic practices. The Antitrust policies have actually enabled different companies to compete on an even platform. The best example is the software industry which we can safely say that is free from any monopoly. It is a knowledge intensive industry and any individual who has the knowledge logic and the business plan well formulated can start his own venture with a small amount of capital. The contribution by this industry is immense and has resulted in increased efficiency and huge array of products for the small and the big business. The only capital in this industry is knowledge and not equipments as it happens in other industries.