Clayton Act

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The Clayton antitrust act was passed in 1914. The act was drafted by Alabama Democrat Henry De Lamar Clayton. President Wilson instructed congress to come up with the act when he went into office in 1912. Wilson felt as though large companies had too many freedoms. The Act was put into effect to prohibit anticompetitive price discrimination, prohibit against certain tying and exclusive deal practices, expand power to private parties to sue and obtain triple damages, labor exemption that permitted union organizing, prohibition against ant compatible mergers. Company mergers have to go through the Federal Trade Commission and The Department of Justice for regulation to be approached. It is not uncommon for a merger to be disapproved. Like the Sherman Act, the Clayton Act was put into place to promote competition in the economy. The biggest difference with the Clayton and Sherman act is the Clayton Act allows more regulations of mergers. Labor unions and agricultural unions are not included in the act however. This is why strikes and boycotts are allowed as long as public safety and property are not threatened. One interesting organization that is not included in the act is major league baseball. This is because baseball is considered amusement and not a business. Interesting baseball players aren’t categorized as businessmen when players like Alex Rodriguez are making approximately 40k an at bat. Two sections of the Clayton Act would later be amended by Robinson-Patman Act and the Cellar-Kefauver Act. The Robinson-Patman Act would make price and customer discrimination more enforceable. The Cellar- Kefauver amendments dealt with one firm securing stocks or assets of another firm if it would lead to reduced competition. Their amendments also made another interesting change to mergers. In previous acts mergers were only banned if the companies produced the same type of goods. Now due to the more recent changes a car company can be banned from the merger with a...
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