The Importance of Competition
Missouri and federal antitrust laws protect competition. Antitrust laws are “pro-competition,” intended to ensure that businesses have the ability to compete in an open marketplace where they can try to provide goods and services of higher quality at lower prices.
The antitrust laws seek to ensure that industry is competitive, with a number of manufacturers or distributors of products and services all striving to attract customers. Vigorous competition requires businesses to strive to lower their prices and improve the quality of their products and services. Competition stimulates firms to lower their own costs and run their businesses as efficiently as possible.
But when competition is restricted – such as by one company acquiring most competitors or reaching agreements on prices with other competitors – prices are likely to increase and quality is likely to also suffer. If a business does not face competition, it has little incentive to lower its prices or improve its products. If there is only one seller in the market, it may charge higher prices without fearing a loss of sales to a competitor.
Thus, the ultimate goal of antitrust laws is to protect consumers' purchasing power and save jobs and businesses, all at the same time. How? Some businesses might believe that by limiting competition among themselves, they will earn higher short-term profits. Of course, this drives up prices and may result in lower quality products, hurting consumers. However, in the longer term, it will likely be disastrous to the businesses as well. Due to our national and often global economy, competitors from another state, region or country will eventually pierce the market and take business away from the local seller, who has become inefficient and weak due to lack of competition. That may ultimately cause the local business to fail and result in a loss of local jobs.
Competition also creates opportunities for individuals to enter the marketplace and start new businesses. It creates jobs and provides people with a choice of employers and work places. Competition also reduces the need for governmental interference through regulation of business. A free market that is competitive benefits consumers- and, society and preserves personal freedoms.