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What are some ways antitrust laws affect small businesses?

Florida is home to some of the most competitive small businesses in the south. While antitrust laws typically involve larger businesses, such as multinational corporations, it is important to remember that small businesses are not immune to allegations of anti-competitive prices. This may happen when companies collude with competitors to fix the price against consumers, or when competitors engage in underhanded activities to undermine each other.

According to CNBC, the Department of Justice uses a “no economic sense test” to determine whether or not a company violates antitrust laws. If a large monopoly made a business decision that only suited its desires to eliminate the competition, it would fail the test. Even when businesses play fair and gain a big advantage over competitors, it must take care with additional steps that may make it difficult or impossible for other companies in its industry to catch up.

These restrictions may have repercussions for small businesses too. Not every entrepreneur builds a business with the desire to keep operating it for the rest of their lives. Serial entrepreneurs, for example, enjoy building profitable enterprises and selling them to the highest bidder.

Similarly, an aging entrepreneur may wish to retire peacefully by selling their business to the company with the best offer. However, if the highest bidder is already a monopoly in the business, and especially if this small business also dominates a specific niche of the industry, the DOJ may interfere with the acquisition or merger decision.

That said, for the most part, antitrust laws protect small businesses struggling to compete against larger corporations. It helps to ensure big companies do not erect unfair barriers to the growth and success of others. Some critics may point out that in a capitalist economy, the DOJ should focus its attention on other pressing matters. However, when applied fairly, antitrust laws compel companies to focus on internal improvements, such as increased efficiency and better-quality offerings to customers.

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