Sherman Antitrust Act - Wikipedia, the free encyclopedia
Sherman Antitrust Act
From Wikipedia, the free encyclopedia
The Sherman Antitrust Act (Sherman Act,26 Stat. 209
(http://legislink.org/us/stat-26-209), 15 U.S.C. §§ 1
(http://www.law.cornell.edu/uscode/15/7.html)) is a landmark federal statute in the history of United States antitrust law (or "competition law") passed by Congress in 1890. It prohibits certain business activities that federal government regulators deem to be anti-competitive, and requires the federal government to investigate and pursue trusts.
It has since, more broadly, been used to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels.
According to its authors, it was not intended to impact market gains obtained by honest means, by benefiting the consumers more than the competitors. Senator George Hoar of Massachusetts, another author of the Sherman act, said the following:
Sen. John Sherman (R—OH), the
principal author of the Sherman
"... [a person] who merely by superior skill and intelligence...got the whole business because nobody could do it as well as he could was not a monopolist..(but was if) it involved something like the use of means which made it impossible for other persons to engage in fair competition."
Its reference to trusts today is anachronistic. At the time of its passage, the trust was synonymous with monopolistic practice, because the trust was a popular way for monopolists to hold their businesses, and a way for cartel participants to create enforceable agreements. In 1879, C. T. Dodd, an attorney for the Standard Oil Company of Ohio, devised a new type of trust agreement to overcome prohibitions in Ohio against corporations owning stock in other corporations. A trust is an otherwise neutral, centuries-old form of a contract whereby one party entrusts its property to a second party. The property is then used to benefit the first party. The law attempts to prevent the artificial raising of prices by restriction of trade or supply. In other words, innocent monopoly, or monopoly achieved solely by merit, is perfectly legal, but acts by a monopolist to artificially preserve his status, or nefarious dealings to create a monopoly, are not. Put another way, it has sometimes been said that the purpose of the Sherman Act is not to protect competitors, but rather to protect competition, as well as promote and preserve a competitive landscape. As explained by the U.S. Supreme Court in Spectrum Sports, Inc. v. McQuillan 506 U.S. 447 (1993): The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself.
Sherman Antitrust Act - Wikipedia, the free encyclopedia
"This focus of U.S. competition law, on protection of competition rather than competitors, is not necessarily the only possible focus or purpose of competition law. For example, it has also been said that competition law in the European Union (EU) tends to protect the competitors in the marketplace, even at the expense of market efficiencies and consumers."
1 Legislative intent
2.1 Original text
2.1.1 Subsequent legislation expanding its scope
3 Legal application
3.1 Constitutional basis for legislation
3.3 Violations "per se" and violations of the "rule of reason" 3.4 Modern trends
3.4.1 Inference of conspiracy
22.214.171.124 Manipulation of market
3.6 Application of the act outside of pure commerce
4 Preemption by Section 1 of state statutes that restrain competition 5 Criticism
6 See also
References: 1. ^ Officially re-designated and to be recognized from then on as the "Sherman Act" by Congress in the HartScott-Rodino Antitrust Improvements Act of 1976, (Public Law 94-435, Title 3, Sec. 305(a), 90 Stat. 1383 at
3. ^ [See William L. Letwin, Congress and the Sherman Antitrust Law: 1887-1890, 23 U.Chi.L.Rev 221
(Supreme Court 1993).
6. ^ Cseres, Katalin Judit (2005). Competition law and consumer protection (http://books.google.com/books?
7. ^ Footnote 11 appears here: "See the Bibliography on Trusts (1913) prepared by the Library of Congress. Cf.
Homan, Industrial Combination as Surveyed in Recent Literature, 44 Quart.J.Econ., 345 (1930). With few
exceptions, the articles, scientific and popular, reflected the popular idea that the Act was aimed at the
Problems (1929), 367 et seq., 42 Ann.Am.Acad., Industrial Competition and Combination (July 1912); P. L.
Anderson, Combination v. Competition, 4 Edit.Rev. 500 (1911); Gilbert Holland Montague, Trust Regulation
Today, 105 Atl.Monthly, 1 (1910); Federal Regulation of Industry, 32 Ann.Am.Acad
(1908), passim; Clark, Federal Trust Policy (1931), Ch. II, V; Homan, Trusts, 15 Ency.Soc.Sciences 111,
113: "clearly the law was inspired by the predatory competitive tactics of the great trusts, and its primary
purpose was the maintenance of the competitive system in industry." See also Shulman, Labor and the AntiTrust Laws, 34 Ill.L.Rev. 769; Boudin, the Sherman Law and Labor Disputes, 39 Col.L.Rev. 1283; 40
1172. For collection of state statutes on labor activities, see Report of the Commissioner of Labor, Labor
Laws of the Various States (1892); Bull
Thereto, United States Bureau of Labor Statistics (1925); Witte, The Government in Labor Disputes (1932),
(R.S. § 5269, 17 Stat. 366 (1872)) for transporting nitroglycerine and other explosives without proper
18 U.S.C. § 387; Transportation of obscene books, 29 Stat. 512 (1897), 18 U.S.C. § 396; transportation of
illegally killed game, 31 Stat
35 Stat. 1136 (1909), 18 U.S.C. §§ 388-390; white slave traffic, 36 Stat. 825 (1910), 18 U.S.C. §§ 397-404;
transportation of prize-fight films, 37 Stat
interstate commerce, 37 Stat. 670 (1913), 18 U.S.C. § 409; violent interference with foreign commerce, 40
408; transportation of kidnapped persons, 47 Stat. 326 (1932), 18 U.S.C. § 408a-408c; threatening
communication in interstate commerce, 48 Stat
feloniously taken goods, securities or money, 48 Stat. 794 (1934), 18 U.S.C. § 415; transporting
strikebreakers, 49 Stat
interstate commerce, 44 Stat. 1355 (1927), 7 U.S.C. § 491. Cf. National Labor Relations Act, 49 Stat. 449
(1935), 29 U.S.C., Ch
burdening or obstructing commerce. . . ." The Anti-Racketeering Act, 48 Stat. 979, 18 U.S.C. §§ 420a-420e
(1934), is designed to protect trade and commerce against interference by violence and threats
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