Cristiana Moldovan (12) | STAFF REPORTER
Economic competition is common practice in capitalist systems. It involves businesses and firms changing their prices and services with respect to one another in order to appeal to customers and increase profits.
Larger companies, such as Nestle, Coca-Cola, and Disney, will attempt to eliminate competition and accumulate a larger market share by absorbing smaller companies. This maneuver, referred to as a monopoly, gives the larger firm more, or complete control over the prices of that particular industry, limiting the choices for consumers.
This process is beneficial to the businesses as controlling market prices allows them to drive costs up and down to increase and maximize profits.
However, consumers are at a loss due to the potential increase in prices as well as limited choices.
For this reason, many countries will choose to adopt antitrust laws, which are a series of laws and regulations implemented to increase and encourage competition in markets, and limit the possibility of one company dominating the market –a market structure that is prohibited by nearly all countries globally.
A more recent example of the heavy government regulation on monopolistic behaviour is the lawsuit filed by the American Justice Department against the airline company JetBlue’s absorption of the smaller company Spirit. In theory, this merge would significantly limit the competition and choices of consumers seeking national flights in America. The lawsuit is based on the antitrust laws enforced heavily under the Biden administration.
The implementation of these laws is important as choices and various price levels offered by different companies is more equitable to consumers from different economic backgrounds. Increased competition is necessary for balancing market power and the economy.
