Question

Identify some of the adverse legal ramifications of business strategies designed to lessen competition.

Short answer

The Sherman Antitrust Act, 1890

The Clayton Antitrust Act 1914

Step-by-step solution

Defining business strategy

A business strategy is a laid down plan or set of goals that define how a business will compete or play in a market with its products or services.

Identifying some of the adverse legal ramifications of business strategies designed to lessen competition

The legal ramification of business strategies designed to lessen competition are given below:

The Sherman Antitrust Act, 1890, also called antitrust law; this act aims at protecting the public from monopoly. It is based on a belief that competition is the only form of economic activity that can stimulate growth through innovation that leads to efficiency in operation and results in low prices for the customer. It was intended to cover all restrains of commerce, but it soon became apparent that clarification was necessary if all possible abuses were to be covered.

The Clayton Antitrust Act, 1914, was designed to prevent a situation that tends to lessen competition or create a monopoly. Under this act, proof of violation is easier as it prohibited those situations that tend to lessen competition, unlike in the Sherman Act, where it was necessary to prove that the action did lessen competition.