Business Competition- Antitrust

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Business Competition- Antitrust

Antitrust lawsuits are used to put an end to activities that stifle trade liberalization and the economy, as well as to make amends for people who suffer losses as a result of the occurrence (Sawyer, 1). The objective is to maintain a free, open, and competitive industry. Lawsuits may be brought by both businesses and private citizens. A business’s rivals may file an antitrust lawsuit, claiming that the business used anticompetitive tactics. For instance, a business may participate in behaviors that monopolize a specific sector (Sawyer, 1). A set of customers may also bring an antitrust case if they believe that a trader’s anticompetitive actions caused them to pay too much for a good or service. The chosen company that has been sued for anti-competitive behavior is the Big Four American meatpackers.

On June 24, Sysco Corporation, the biggest foodservice distributor in the world, filed a civil anti-trust lawsuit against the Big Four American meatpackers, alleging that the businesses had fixed the beef prices in a Houston, Texas, U.S. District Court (2). The Big Four are charged with conspiring to obstruct the quantity of cattle killed since 2015 in order to artificially inflate beef prices. Two anonymous meat packing business informants who testified to the Big Four’s conspiracy are cited in Sysco’s case. The CEOs of Big Four argued that the rise in prices was caused by the current inflation and the fluctuation of demand and supply in the market (2). In this case, the Big Four were wrong to fix the prizes of beef and therefore reducing the market for Sysco and other competitors. The consumers were also at the losing end since the beef prices were so high. The profits and sales were getting relatively lower in the beef industry.

Horizontal and Vertical Restraints of Trade

Any conduct that seeks to restrict a group’s capacity to engage in operations is a restraint of trade. Trade restrictions can be categorized as horizontal or vertical. A horizontal restraint of trade involves an agreement among competitors at the same distribution level for the purpose of minimizing competition (Harrington, 3). A good example is an agreement between two retailers on the price of a product. This is because if they sell the product at different prices, the one selling at a higher price is likely to have lower sales. On the other had vertical restraint of trade involves parties at different levels of a market structure for example manufacturers and wholesalers in order to influence competition. Vertical restraint of trade can occur during production, distribution or supply.

Sources

Sawyer, Laura Phillips. 2019. US antitrust law and policy in historical perspective. Retrieved from https://www.hbs.edu/ris/Publication%20Files/19-110_e21447ad-d98a-451f-8ef0-ba42209018e6.pdfIdaho Business Review. 2022. Sysco has beef with the Big Four Meat Packers. Retrieved from file:///C:/Users/user/Downloads/Sysco%20has%20a%20beef%20with%20the%20Big%20Four%20meat%20packers.PDFHarrington, Joseph. 2020. Horizontal and vertical agreements: Differences between the European Union and the United States. Retrieved from http://scindeks-clanci.ceon.rs/data/pdf/0003-2565/2020/0003-25652001007H.pdf