Passed in 1890, it makes it illegal for competitors to make agreements with each. The sherman act broadly prohibits 1 anticompetitive agreements and 2 unilateral conduct that monopolizes or. The law was passed during the gilded age the 1870s to 1900 when the united states. Sherman antitrust act overview and history, sections, impact. The sherman antitrust act of 1890 was the first measure passed by the u. Sherman antitrust act of 1890 promised to rein in the trusts through federal prosecutions.
By placing these letters in historical context, this paper helps resolve a debate about shermans true intentions in creating an antitrust law. Ediscovery initiatives at the antitrust division, tracy greer. The clayton act sought to enhance and address weaknesses in the sherman act by preventing such unfair or anti. Us antitrust law and policy in historical perspective harvard. Promoting consumer welfare through clearer standards for section 2 of the sherman act, thomas o. Anticompetitive agreements anticompetitive agreements are prohibited by section 1 of the sherman act in the united states. Pdf the evolution ofantitrust law in usa researchgate.
Kenneth arrow, uncertainty and the welfare economics of medical care. The sherman antitrust act of 1890, passed almost unanimously by congress, gave the justice department and later, via the clayton act, the federal trade commission authority to attempt to block anticompetitive mergers and pricefixing through the courts. Section 1 of the sherman act reaches naked cartels of competitors, vertical agreements, joint ventures, and many mergers, provided that the conduct requires the coordinated efforts of two or more independent economic. Download the pdf to view the article, as well as its associated figures and tables. What is section 2 of the sherman antitrust act anti trust. If an action is determined to be a restraint of trade, the following standards apply to determine whether the arrangement is illegal. Three case studies abstract the majority of the research literature on early antitrust law focuses on prices and output, but few empirical studies decompose these symptoms into the causes that the underlying theory suggests. It was named for senator john sherman of ohio, who was a chairman of the senate finance committee and the secretary of. This article is composed by 4 main components, such as. In particular, shermans letters reveal that he was more concerned with protecting the interests of. The sherman antitrust act and the railroad cartels. The sherman antitrust act, which this year marks its centennial, has had a long history of both vigorous enforcement and virtual oblivion.
The journal of the antitrust, ucl and privacy section of. John sherman of ohio, who was an expert on the regulation of commerce. Sherman act and the 1914 clayton act, which have been refined through amendment over time. This paper presents a survey of the letters of senator john sherman, who pushed for passage of the first federal antitrust law in the united states. Wikipedia article, quotes, wikidata item formally known as the act of july 2, 1890, ch.
Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce are hereby declared unlawful antitrust statutes sherman act ec treaty article 81 1. The letters of john sherman and the origins of antitrust. This article provides a background of antitrust violations and the flawed economic theory of optimal deterrence that has played a critical role in shaping the criminal sanctions for sherman act. In particular, section 1 of the sherman act10 and section 3 of the clayton act11 can be brought to bear on conduct that is unilateral in economic form but multilateral in the sense that. Crossref antitrust compliance policy and guidelines ver. Subject to subsection d, in any civil action alleging a violation of section 1 or 3 of the sherman act 15 u. Some sections have been edited or eliminated because of space concerns. Doj may enforce the sherman act prohibitions through criminal or civil actions. Sherman antitrust act, first legislation enacted by the u. The sherman antitrust act is a landmark federal act passed by congress in 1890. This chapter includes among other statutory provisions the sherman act, comprising sections 1 to 7 of this title, the clayton act, comprising sections 12, 14 to 19, 20, 21, and 22 to 27 of this title and sections 52 and 53 of title 29, labor, the wilson tariff act, comprising sections 8 and 9 of this title, the robinsonpatman price.
K2,k21,k23,l4,l43,l44,l5,l51 abstract since the passage of the interstate commerce act 1897 and the sherman act 1890, regulation and antitrust have operated as competing mechanisms to control competition. The core principle of the sherman antitrust act is to ensure healthy and fair freemarket competition. Section 1 delineates and prohibits specific means of anticompetitive conduct, while section 2 deals with. Fortunately, there are policy toolscreated by statutes such as the sherman antitrust act, the clayton act, and the federal trade commission actthat can be used by enforcement agencies to reverse these developments. In this article, we explain the important elements. Introduction of antitrust law, history of sherman act, history of clayton act and the. Abstract price fixing, as it relates to commodities and articles of trade, has been declared by the united states supreme court to be an unreasonable restraint of trade and illegal within the meaning of the sherman antitrust act. Antitrust in great britain and america, 18801990 cambridge, 1992. Antitrust enforcement and the consumer department of justice. Sherman acts 100 years of protecting competition the. In recent years it has not been as widely used by the. For example, section 1 of the sherman antitrust act prohibits contracts, combinations, or conspiracies. The university of oxford centre for competition law and policy.
Approved july 2, 1890, the sherman antitrust act was the first federal act that outlawed monopolistic business practices. Reagan administrations antitrust policy, original intent and the legislative history of the sherman act. Intent with regards to the second section of the sherman antitrust act is especially important since it has to be there for an activity to be deemed illegal. Sherman antitrust act of 1890 article about sherman. It was named for senator john sherman of ohio, who. Until the advent of the reagan administration there was an general consensus in the courts and in most of academia with regard to the values underlying and. The letters of john sherman and the origins of antitrust springerlink. Passed under the presidency of benjamin harrison, it prohibits certain business activities that federal government regulators deem to be anticompetitive, and requires the federal government to. Reexamination a of the consumerwelfare hypothesis christopher grandy an important tenet of the chicago school of antitrust asserts that the sherman acts framers sought to foster consumer welfare. It consists of the cartwright act, the unfair practices act upa, and the unfair competition act ucl, as well as various statutory restrictions on covenants not to compete. The clayton antitrust act of 1914, was enacted on october 15, 1914, with a goal of strengthening provisions of the sherman antitrust act.
Enacted in 1890, the sherman act had been the first federal law intended to protect consumers by outlawing monopolies, cartels, and trusts. For instance, enforcement agencies and courts can block mergers that are likely to result in. Sherman antitrust act primary source worksheet teaches students about trusts, monopolies, and the law that attempted to break them up. Congress 1890 to curb concentrations of power that interfere with trade and reduce economic competition. Pdf antitrust legal traps in trade and monopolization. Section 1 of the sherman act broadly prohibits actions that in some way restrain trade. California statutory antitrust law is found at sections 16600 et seq. If not present, the monopolistic nature of a company needs to be examined in much greater depth, and at times, may not be viewed in breach of the sherman act. The sherman act is the nations oldest antitrust law. Sherman antitrust act article about sherman antitrust. Sherman act 7 foreign trade antitrust improvements act of 1982, 15 u.
The key pieces of antitrust legislation in the united statesthe sherman antitrust act of 1890 and the. Sherman antitrust act, 1890, first measure passed by the u. The sherman antitrust act and the railroad cartels the. The sherman antitrust act of 1890 is a united states antitrust law that regulates competition. The sherman act home alphabetic chronological legal area product full textsearch key statutes glossary links antitrust.
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