Legal Issues and Regulations Regulations that Promote Competition

Legal Issues and Regulations

Regulations that Promote Competition � As an entrepreneur, there are laws that affect almost every aspect of your business. � Even the competition that business face is regulated by the government � To make sure that competition is fair, the government has enacted various laws to help protect businesses.

Law and Regulations � Antitrust Legislation – begin in 1890 created to make monopolies in certain industries illegal. ◦ Sherman Act – makes it illegal for competitors to get together and set prices on the products or services they sell. ◦ Clayton Act – law states that it is illegal for a business to require customer to buy exclusively from it or to purchase one good in order to be able to purchase another good.

Antitrust Legislation � Robinson-Patman Act – This law protects small businesses from unfair pricing practices � Wheeler-Lea Act – This law bans unfair or deceptive actions or practices by businesses that may cause an unfair competitive advantage.

Government Agencies that Protect Competition � The Antitrust Division of the Justice Department and the Federal Trade Commission are two government agencies that work to make sure competition remains fair. � Justice Department – takes legal action against any businesses it believes has tried to monopolize an industry.

Government Agencies that Protect Competition continued… � Federal Trade Commission – FTC deals with issues that touch the economic life of every American

Intellectual Property � Patents – is the grant of property right to an inventor to exclude others from making, using, or selling his or her invention. � Copyrights – is a form of intellectual property law that protects original works of authorship, including literary, dramatic, musical and artistic works. � Trademarks – is a name symbol, or special mark used to identify a business or brand of products.

Laws that Protect the Consumer � Licenses – state and local governments require some businesses to have licenses – beauty salons, restaurants, and health and fitness centers etc. � Zoning Laws – local governments often establish zoning regulations that control what types of buildings can be built in what areas. Like business and residential.

Consumer Protection Laws � The Federal Food, Drug and Cosmetic Act of 1938 – bans the sale of impure improperly labeled, falsely guaranteed and unhealthful foods, drugs and cosmetics. � The Consumer Product Safety Act of 1972 – sets the safety standards for products other than food and drugs. Can cause a product recall.

� The Truth-in-Lending Act of 1968 – requires all banks to calculate credit costs in the same way. When consumer gets a loan the lender must provide 2 types of info about the loan’s cost—the finance charge and the annual percentage rate. � The Fair Credit Billing Act of 1974 – is part of the Truth and Lending Act and helps consumers correct credit card billing errors. Also gives the consumer a method for resolving problems relating to product quality.

When to Get Legal Advice � An entrepreneur you will need to decide when you should seek advice and when you can handle the situations on your own ◦ Hire an attorney – can help you with legal issues. ◦ Contracts - when entering legally binding agreements between 2 or more persons or parties