How does government encourage or increase competition among businesses?

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How does government encourage or increase competition among businesses?
How does government encourage
or increase competition among
What is the goal of the game
• A monopoly is the sole provider of a good or
• In a market, multiple businesses compete with
multiple consumers to set the market price. With
a monopoly, consumers suffer because they are
forced to pay whatever price the monopoly sets.
They don’t have the option to shop somewhere
• One of the goals of the U.S. government is to
encourage fair competition in the market place.
Antitrust Laws
• A trust is a group of businesses that threaten
Antitrust Laws
• In 1890, the Sherman Antitrust Act banned
businesses that prevented competition.
• In 1911 the government broke up the
Standard Oil Company.
• In 1914 the Clayton Antitrust Act expanded
the law to include unfair business practices.
(i.e. a person cannot be on the board of
directors for two competing companies)
A merger is where two or more companies
combine to form a single business. This may
violate antitrust laws, and could be blocked by
the government
The Federal Trade Commission (FTC) enforces
these laws.
Natural Monopolies
Sometimes it is cheaper and easier to let one
company produce a good or service (i.e.
building power lines for an expanding city).
Government may allow this, but will regulate
price changes and other business practices.
Sometimes governments take over these
natural monopolies and run them themselves
(i.e. basic services like water and sewer).
Natural Monopolies
When government decides to end natural
monopolies, it is called deregulation.
How does government regulate
The U.S. government has set many business
regulations in place to protect employees'
rights, protect the environment and hold
corporations accountable for the amount of
power they have in this business-driven
society. Some of these regulations stand out
more significantly than the others because of
their relevance to every U.S. employee and
Laws pertaining to marketing and advertising set
in motion by the Federal Trade Commission
(FTC) exist to protect consumers and keep
companies honest about their products. Every
business in the country is required to comply
with the truth-in-advertising laws and could
face lawsuits for violation.
• Truth-in-advertising laws are made up of
dozens of tidbits under three main
• - advertising in the United States must be
truthful and non-misleading;
• - businesses need to be able to back up claims
made in advertisements at any time;
• - and advertisements must be fair to
competitors and consumers.
Additionally, in compliance with the Fair
Packaging and Labeling Act of 1966, all
product labels must include information about
the product, such as nutrition, size, and
distribution and manufacturing information.
Employment and Labor
Among the ever-changing regulations in
business are employment laws. These laws
pertain to minimum wages, benefits, safety
and health compliance, work for non-U.S.
citizens, working conditions, equal
opportunity employment, and privacy
regulations--and cover the largest area of
subjects of all the business regulations.
Employment and Labor
The Fair Labor Standards Act, applied by the
Wage and Hour Division, set the minimum
wage for workers in the United States. There
are also several required benefits, including
unemployment insurance, Workers'
Compensation Insurance and employee Social
Security assistance.
Employment and Labor
The Immigration and Nationality Act works to
ensure that only U.S. citizens and individuals
with work visas can be hired, and every
business must keep on file I-9 eligibility forms
for applicable employees.
The Environmental Protection Agency (EPA)
enforces environmental laws passed by the
federal government through educational
resources, frequent inspections and local
agency accountability. The Environmental
Compliance Assistance Guide exists to help
businesses--small and large alike--achieve
environmental compliance, and serves as an
educational resource more than an enforcer.
Sensitive information is usually collected from
employees and customers during hiring and
business transactions, and privacy laws prevent
businesses from disclosing this information
freely. Information collected can include social
security number, address, name, health
conditions, credit card and bank numbers and
personal history.
Not only do various laws exist to keep
businesses from spreading this information,
but people can sue companies for disclosing
sensitive information.
Safety and Health
The Safety and Health Act of 1970 ensures that
employers provide safe and sanitary work
environments through frequent inspections and a
grading scale. A company must meet specific
standards in order to stay in business. These
regulations have changed frequently throughout
the years alongside the changing sanitary and
workplace standards. In accordance with the
1970 act, employers must provide hazard-free
workplaces, avoiding employee physical harm
and death, through a number of procedures.
Organizations that Protect the Health
and Safety of the Public
The Food and Drug Administration (FDA)
ensures that food and drugs that people buy
are safe for consumption.
Organizations that Protect the Health
and Safety of the Public
The Center for Disease Control (CDC) works to
reduce the spread of diseases.
Organizations that Protect the Health
and Safety of the Public
The Consumer Product Safety Commission
(CPSC) protects consumers from injury. If they
feel a product is unsafe, they may recall the
Organizations that Protect the Health
and Safety of the Public
The Occupational Safety and Health
Administration (OSHA) sets strict guidelines
that businesses must follow to keep their
employees safe.
Regulating private business can be difficult
because it can cost business a lot of money.
For example, if something is recalled, a
business must pay to remove or fix all the
items in circulation, or complying with safety
regulations can be costly.
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