Antitrust prices, antitrust laws were formed. The first Antitrust

Antitrust laws are a set of laws that were made to protect consumers from unfair market places by promoting fair competition and prohibit monopolies from existing.  These laws help to regulate the behavior and conduct of organizations to prevent from illegal acts such as price fixing, restraining, price discrimination or monopolizing (“Legal Information Institute”, 2007).  Dated back to the 1800’s, it was common for one major company to have significant power over the economy, also known as trusts.  Oil, railroads, steel and sugar were each controlled solely by one company and could set prices as high as they wanted due to its high demand (Killingsworth 2010).  Out of fear that these companies would take control of the market and set higher prices, antitrust laws were formed.  The first Antitrust law was created in 1890 when the Sherman Act was passed making it illegal for businesses to have an unfair monopoly or have an agreement to set the same prices with other businesses, also known as price fixing (“Federal Trade Commision”).  Along with the Sherman Act, two other acts were passed. In 1914, the Clayton Act was passed to help protect consumers from merging companies who were apt to work together in pricing, and the Federal Trade Commision Act created a new federal agency that regulates, enforces and investigates to assure there is no unfair competition and to punish those that do so (“Federal Trade Commission”).  Not only do these Antitrust laws apply in the regular market economy selling goods, but has become big in healthcare as well.  Since the acts were implemented, multiple court cases involving insurance companies, hospitals, and other services related to health care have tried merging with other companies and in result creating anti competitive behaviour.  With hospitals merging and deciding to work together to create a more valuable health care system for patients, it can be difficult for these organizations to do so without violating antitrust laws.  Although this can be avoided by following rules and guidelines, organizations may not bother or try to surpass them and get in trouble for violating these laws.  Although these unfair mergers and competitions still exist, it has become less frequent over the years with the amount of regulation by the Federal Trade Commission and Antitrust Division of the Justice Department.  More companies are becoming familiar with the laws and additionally larger companies are selling the same items and already providing fair competition.  This brings up the question of if it is still necessary in the United States today.  There are many reasons why people may want to move away from this act as for some it seems irrelevant at this day in age, but the purpose is to protect and promote competition for every aspect of the economy which will always be relevant.  Ultimately, the existence of antitrust laws are still needed today and are extremely important in keeping several unfair competition behaviors away from the marketplace that could easily become a problem if the acts were repealed. The very first antitrust act that was put into place was the Sherman Antitrust Act, which was approved on July 2, 1890, and signed into law by President Benjamin Harrison.  This act had the purpose of giving Congress the power to ban trusts, monopolies, and plans in prohibiting interstate or federal trade.  Trusts are an arrangement in which 2 or more shareholders from different companies transported their shares into a common pot of trustees, and in exchange, received a certificate giving them to a quantified share of the earnings within the trust.  Monopolies are when one supplier has complete control of an entire industry, having no competition, which can lead to high prices, inferior services, and corrupt behavior.  Before the Sherman Antitrust Act was put into place, there were already a number of states who had already enacted similar laws at this point to limit interstate commerce.  The Sherman Antitrust Act passed with a vote of 51 to 1 in the Senate, and 242 to 0 in the House of Representatives.  The Federal Government was now able to put these trusts to an end, punishments could be granted up to $10,000,000 for corporations, $350,000 for an individual, 3 years in prison, or both depending on the decision of the court (“The Sherman Antitrust Act”, 2004).  A court case example from the U.S. Department of Justice, Antitrust Division Cases shows a violation of the Sherman Act was filed on April 8, 2013 with the case U.S. v. Chiropractic Associates, Ltd of South Dakota. This lawsuit was based on the fact that the Chiropractic Associates, Ltd of South Dakota (“CASD”) had been settling on prices and contracts with insurers on behalf of other competing chiropractic services in the state (“Justice Department Challenges Joint Contracting”). In result of joint contracting with insurers, the customers of CASD ended up paying higher prices for services. This is just one of the many cases related to healthcare that demonstrate how companies come together and settle on certain prices that end up benefiting both parties but result in consumers paying unfair prices. Even though this act was put into place back in the 1800’s, it is still very prevalent today as it was in this case. Another way the Sherman Antitrust Act applies to healthcare is when doctors are denied admission to, or expelled from the medical staff in a hospital.  In healthcare, doctors usually don’t work for hospitals, they are generally admitted to have privileges at specific hospitals, they can be accepted as a member of the medical staff by the employees themselves, in accordance with their rules and regulations.  When choosing these physicians and intermittently reviewing them, they can be denied admittance or expelled from the medical staff.  When rejected admission to, or expelled from, the medical staff can file a claim of a violation to the Sherman Antitrust Act stating that they are being restrained from their trade, to practice medicine.  The relationship with physicians and hospitals is unique, which is why it fulfills a violation of the Sherman Act.  A sole business cannot collaborate within its organization to restrain trade.  A plan to do this entails a multiparty effort including two or more entities.  Since doctors are independent contractors, they represent individual economic entities.  When voted by the medical staff to admit or reject a doctor, they are acting in the concerted, or joint, fashion described by the statute (“Health Care Law – Antitrust And Monopoly”).The next Antitrust Act out into place was The Federal Trade Commission Act, which was signed into law on September 26, 1914 with the purpose to prohibit unfair methods of competition in trade.  Later on, Congress had passed laws granting authority to the Federal Trade Commission to patrol anti competitive markets.  Congress also passed a broad prohibition against “unfair deceptive acts or practices” in 1938, and in 1975, the Federal Trade Commission was granted the right to adopt industry-wide trade regulation rules (“About the FTC”, 2017).  They were allowed to go after corporations for civil money practices, branding, false advertisement, and clear labeling.  They had the ability to conduct investigations upon businesses and corporations if they detected illegal activity among the Antitrust Laws.  If a violation is found, they may order a cease and desist, which is basically a notice informing the company that threatens them if they don’t stop, legal action will be taken.  Furthermore, they have the power to create trade regulation laws, like bait and switch, this is when a business advertises a bargain, and substitutes the good with a more expensive one.  The Federal Trade Commission is not just essential for regulating, enforcing, and filing suits against those who violated these acts, but also give guidance for new methods of healthcare that may involve cooperation with multiple providers, such as Accountable Care Organizations (ACO’s). Accountable Care Organizations as described from the Centers for Medicare and Medicaid Services, “are groups of doctors, hospitals, and other healthcare providers, who come together voluntarily to give coordinated high quality care to their Medicare patients”  (Centers for Medicare and Medicaid Services CMS, 2017). ACO’s have the potential to create anti competitive behaviour from providers jointly working under the Medicare beneficiaries, and therefore consumers could wind up being charged with higher prices and lower quality care. The Federal Trade Commission realized this could become a problem and created a policy statement giving guidance to providers on how to help them continue to have “pro competition” and ensure customers are receiving the best quality care at an affordable cost (“Department of Justice/Federal Trade Commission” DOJ/FTC). Within this statement are examples of how an organization could behave which would be considered a violation of the anti-trust act as well as examples of which it is not. Additionally, there are The Clayton Antitrust Act was signed into law on October 15, 1914 by President Woodrow Wilson, in an attempt to restrain the power of monopolies and keep competition in the market from the very beginning of their acts.  They go after anything that is not in the best interest of the market.  This purpose was to add onto and strengthen the Sherman Antitrust Act.  This act prevented methods of competition that were unfair in the marketplace, such as price discrimination and anti-competitive mergers.  Price discrimination is the act of selling the same product at different prices to different consumer groups.  Strikes, boycotts, and labor unions all became legal under the federal law.  (“The Clayton Antitrust Act”).  The Federal Trade Commission and Antitrust Division in the Department of Justice enforce the Clayton Antitrust Act.  Some necessities of this act determine how the Federal Trade Commission and Antitrust Division can respond to violations.  Other parts of the act are driven to avoid antitrust issues, like when two organizations want to merge, they have to acquire approval from the Federal Trade Commission.The Clayton Act is still very much prevalent today with multiple cases still being brought to court accusing organizations of unfair competition. A recent example is the case U.S. et al v. Anthem, Inc. and Cigna Corp that was filed on July 21, 2016. In this case, Anthem and Cigna had plans of merging into one insurance company, becoming Anthem-Cigna. Having the two merg was a violation of the Clayton Antitrust Act because Anthem is the nation’s second largest health insurance company and Cigna is the fourth largest (“Justice Department and State Attorneys”). Since they are two of the biggest health care insrurers in the country, merging them would create extreme anti competitive behaviours. “The Department alleged that the merger would substantially lessen competition in dozens of health insurance markets throughout the United States, resulting in higher prices, lower quality, and reduced innovation” (“Justice Department and State Attorneys”). Looking from the perspective of the insurance companies, it would have seemed like a smart move to make to combine two of the largest healthcare insurers and wipe out one of the biggest competitors to increase profit, but they failed to recognize that these behaviors would result in the violation of the Clayton Act. If these laws were not in place to protect these instances from happening, it would’ve been very likely that insurance prices would go way up and left consumers no choice but to continue to pay them. Section 7 of the Clayton Antitrust Act doesn’t allow mergers to lessen competitions or try to create a monopoly.  It prohibits national hospital-management companies from buying multiple hospitals in one single town, and can also forbid joint ventures with doctors and hospitals or even between previously competing groups of physicians.  There are many exemptions in these prohibitions, like if a hospital is on its way to bankruptcy, then a merger will be permitted.  Also, non-profit hospitals are entirely exempt from part of the Clayton Antitrust Act- Section 7.  Now, federal district courts are unsure as to whether or not the Clayton Act even applies to non-profit hospitals.  In all cases, market analyses show that appropriate markets don’t lessen competition or create monopolies, which can be used as evidence to sustain merger decisions with two or more healthcare entities (“Health Care Law – Antitrust And Monopoly”).The Antitrust Division is a division in the United States Department of Justice, their purpose is to enforce antitrust laws in the United States.  The mission of their the Division is to promote competition economically by administering ways to guide these antitrust laws.  The overall goal of enforcing the antitrust laws to keep economic freedom and opportunities around in the U.S. by encouraging corporations to practice free and fair competition in the marketplace.  It is so important to have competition in a free market because it is beneficial to Americans.  It provides lower prices, better quality, and more choices.  It also offers opportunities to businesses to compete against each other on the price and quality of goods and services.  Competition in an open market also tests and strengthens these businesses in the U.S., which makes them have a better chance at succeeding overseas. Antitrust laws apply to all industries, including manufacturing, transportation, distribution, healthcare and marketing.  These laws restrict a wide range of practices restraining trade, like, price-fixing plans, corporate mergers that have a high probability of decreasing the competitiveness of certain markets, and predatory acts with the objective to accomplish or sustain monopolistic power.  When enforcing the Antitrust Laws, the Antitrust Division takes legal action against particular violations of the antitrust laws.  In these cases, they file criminal lawsuits, which can result in large fines and jail sentences.  In other situations, the Division takes civil action and requests a court order that prohibits violations of the law in the future and makes it necessary to take steps to fix the anticompetitive effects of past violations. In addition to enforcing the antitrust laws, the Division also encourage competition, with the intentions of promote competition in areas of the economy that may be subject to government regulation. These sectors are federally regulated industries (communications, banking, agriculture, securities, transportation, energy, and international trade), and State or locally regulated industries (insurance, housing, health care, public utilities, professional and occupational licensing, certain aspects of banking, and real estate).  The Division offers guidance on antitrust laws to businesses, and a lot of the guidance is done with the Federal Trade Commission.  This guidance clarifies the limits of behavior that is accepted, and is supposed to reduce ambiguity within the parameters of these laws.  This guidance saves money for the government and companies by facilitating their structure and helping to organize their actions in unity with these Antitrust laws.  For these businesses to actually receive this guidance, they must request for a formal business review.???? The Division’s advocacy efforts include participation on Executive Branch policy-making task forces, preparation of testimony on legislative initiatives, publication of reports on regulated industry performance, and intervention in regulatory agency proceedings (“Mission”, 2015).”The antitrust laws are about creating opportunity, about having an open economy where people and businesses with visions can pursue and develop those visions without fear of unfair exclusion” (Bingaham 1994).In the healthcare field, competition is beneficial for consumers.  It helps with containing costs, improving quality, expanding choices, and encouraging innovation.  The Antitrust Division implements the antitrust laws in the healthcare industry to guard and maintain competition and to also avoid anticompetitive behavior.  The Antitrust Division also get involved with competition by supporting and endorsing competition. The Division recommends state and federal government entities on the impacts of planned legislative or regulatory actions that affect health care competition and consumers.  The competition advocacy efforts help ensure that regulation and health care competition function effectively together for the benefit of consumers.  The Antitrust Division offers assistance through its business review process to contributors in the healthcare field to assist them to comply with our nation’s antitrust laws.  Also, the Division has public workshops to progress the growth and implementation of our country’s antitrust laws (“Health Care”, 2017).