Eli5: What is an Antitrust Lawsuit?

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If a single company gains an excessive amount of domination over a particular market segment, this can often give them the ability to use that domination to force unfair conditions upon consumers and/or other companies.

So the government has some laws that allow it to challenge companies that it thinks have misused a monopoly in that way.

A classic example was back in the early 1980’s. AT&T basically controlled the vast majority of the telephone systems/infrastructure across the entire US, and used their power over the system to overcharge consumers and prevent competitors. The government brought an antitrust suit against them, and the result was that their nationwide phone system was broken up into a bunch of smaller regional companies that were separated from AT&T itself.

A bit more recent big example is around 2000 the government brought antitrust action against Microsoft, because at the time their Windows operating system held about 95% PC market share. One of the biggest complaints regarding them at the time was that they used that dominance of the operating system market to tell PC manufacturers that were making PCs that they couldn’t pre-install software that competed with other Microsoft programs.

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