The value of competition: Consumer and economic benefits

This week, the Office of the Attorney General’s “Consumer Caution Corner” discusses the value of competition in the marketplace and how it benefits consumers.

What if there was only one grocery store in your community? What if you could buy a phone from only one retailer? What if only one dealer in your area sold cars? Without competition, the grocer may have no incentive to lower prices. The phone shop may have no reason to offer a range of choices. The car dealer may have no motivation to keep its showroom open at convenient hours or offer competitive financing. Competition in America is about price, selection, and service. It benefits consumers by keeping prices low and the quality and choice of goods and services high. Competition also encourages businesses to offer new and better products. Competition makes our economy work.

What is antitrust?
The word “antitrust” dates from the late 1800s, when powerful companies dominated industries, working together as “trusts” to stifle competition. Thus, laws aimed at protecting competition have long been labeled “antitrust.” Fast forward to the 21st century: you hear “antitrust” in news stories about competitors merging or companies conspiring to reduce competition. By enforcing antitrust laws, the Federal Trade Commission helps to ensure that our markets are open and free. The OAG and the FTC promote free and open competition and challenge anticompetitive business practices to make sure that consumers have access to quality goods and services at competitive prices, and that businesses can compete on the merits of their work. The OAG and the FTC do not choose winners and losers—you, as the consumer, do that. Rather, our job is to make sure that businesses are competing fairly within a set of rules.

Business practices actively monitored by the OAG and the FTC
Agreements among competitors: It is illegal for business rivals to act together in ways that can limit competition, lead to higher prices, or hinder other businesses from entering the market.

Monopoly Activity: A monopoly exists when one company controls a product or service in a market. If a company gains a monopoly because it offers consumers a better product at a better price, that is not against the law. But if it creates or maintains a monopoly by unreasonably excluding other companies, or by impairing other companies’ ability to compete against them, that conduct raises antitrust concerns.

Other Anticompetitive Conduct: Business strategies that reduce competition may be illegal if they lack a reasonable business justification.

How to keep the Commonwealth’s markets competitive?
By challenging anticompetitive business practices, the OAG and the FTC help to ensure that consumers have choices in price, selection, and service. To learn about competition problems, the OAG and the FTC often receive information from consumers like you. If you suspect illegal behavior, please notify the OAG and/or the FTC.

Each week, the OAG’s Consumer Protection Education Program aims to provide consumers and businesses with the “know-how” to identify and protect themselves from unfair trade practices and marketplace schemes. If you would like to file a consumer complaint, please pick up a form at the OAG (on Capital Hill) and then please submit it by email to consumer_counsel@cnmioag.org.

We cannot act as your private attorney. If you need legal assistance, we will recommend that you contact a private attorney or legal aid organization. We cannot give legal advice or act as your private attorney. (Michael J. Cyganek, Special to the Saipan Tribune)