Competitive markets are markets in which economic rivalry is to enhance efficiency. Market “forces” determine the winners and losers of this rivalry, and competition will – ultimately – force inefficient losers out of the market.
Who, then, forces the winner(s) to act efficiently? By the end of the nineteenth century, this question was first raised in the United States of America. After a period of intense competition “the winning firms were seeking instruments to assure themselves of an easier life”; and they started to use – among other things – the common law “trust” to coordinate their behaviour within the market. To counter the anti- competitive effects of these trusts, the American legislator adopted the first competition law of the modern world: the Sherman Antitrust Act (1890). The Act attacked two cardinal sins within all competition law: anti-competitive agreements, and monopolistic markets.