Monopolies
Usually, when most people hear the term "antitrust" they think of monopolies. Monopolies refer to the dominance of an industry or sector by one company or firm while cutting out the competition.
One of the most well-known antitrust cases in recent memory involved Microsoft, which was found guilty of anti-competitive, monopolizing actions by forcing its own web browsers upon computers that had installed the Windows operating system.
Regulators must also ensure monopolies are not borne out of a naturally competitive environment and gained market share simply through business acumen and innovation. It’s only acquiring market share through exclusionary or predatory practices that is illegal.
Below are a few types of monopolistic behavior that can be grounds for legal action:
Exclusive Supply Agreements: These occur when a supplier is prevented from selling to different buyers. This stifles competition against the monopolist as the company will be able to buy supplies at potentially lower costs and prevent competitors from manufacturing similar products.
Tying the Sale of Two Products: When a monopolist has dominance in the market shares of one product but wishes to gain market shares in another product, it can tie sales of the dominant product to the second product. This forces customers for the second product to buy something they may not need or want and is a violation of antitrust laws.
Predatory Pricing: Often hard to prove, and requiring a careful examination on the part of the FTC, predatory pricing can be considered monopolistic if the price cutting firm can cut prices far into the future and has enough market share to recoup its losses down the line.
Refusal to Deal: Like any other company, monopolies can choose who they wish to conduct business with. However, if they use their market dominance to prevent competition, this can be considered a violation of antitrust laws.