The Sherman Act of 1890
The Sherman Act of 1890 was one of the first national laws design to regulate competition. It is surprisingly brief and, at glance, directly to the point with two sections. Section 1 of the Sherman law prohibits agreements in restraints of trade as well as monopolization. Example includes price-fixing and dividing up markets. Section 2 of the Sherman law forbids monopolizing or attempting to monopolize. The two sections state:
• “Section 1: Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations is declared to be illegal.” (McConnell, Brue, & Flynn, 2012, p. 375).
• “Section 2: Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony” (as later amended from “misdemeanor”)” (McConnell, Brue, & Flynn, 2012, p. 375).
The Clayton Act of 1914
The Clayton Act was created in 1914 and is known as the Clayton Act of 1914. “The Clayton Act simply sharpened and clarified the general provisions of the Sherman Act” (McConnell, Brue, & Flynn, 2012, p. 376). Four sections of the Clayton Act were designed to strengthen the Sherman Act. Section two outlaws price discrimination; section three prohibits tying contracts; section seven prohibits the acquisition of stocks of competing corporations when the outcome would be less competition; and section eight prohibits the formation of interlocking directorates. Tying contracts are contracts that that requires that a buyer purchase another (or others) of its products as a condition for obtaining a desired product. Interlocking directorates is a situation where a director of one firm is also a board member of a competing firm.
Federal Trade Commission Act of 1914
The Federal Trade Commission Act... [continues]
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