At trial, the Justice Department had successfully argued that American petroleum conglomerate Standard Oil had violated the Sherman Act by using economic threats against competitors and secret rebate deals with railroads to build a monopoly in the oil refining industry. antitrust law as a "rule of reason" in its landmark decision Standard Oil Co. 1 in Cleveland, Ohio, pictured) was a major company broken up under United States antitrust laws. Rise of "Rule of Reason" (1910s–1930s) Standard Oil (Refinery No. The Justice Department sued 45 companies under the Sherman Act during the presidency of Theodore Roosevelt (1901–09) and 90 companies during the presidency of William Howard Taft (1909–13). The rise of the Progressive Era prompted public officials to increase enforcement of antitrust laws. With little interest in enforcing the Sherman Act and courts interpreting it relatively narrowly, a wave of large industrial mergers swept the United States in the late 1890s and early 1900s. Attorneys General in power during the 1890s and early 1900s showed relatively little interest in doing so. Department of Justice the authority to enforce it, but the U.S. Federal judges began trying to develop legal principles for distinguishing between "naked" trade restraints between rivals that suppressed competition and other restraints that were only "ancillary" to other cooperation agreements that promoted competition. § 2).Īmerican courts quickly began struggling with the Sherman Act's broad and vague language, recognizing that interpreting it literally might make even simple business associations like partnerships illegal. Most other countries now call antitrust law "competition law" or "anti-monopoly law". states passed laws making it easier to create new corporations. These " corporate trusts" died out in the early 20th century as U.S. The term "antitrust" came from late 19th-century American industrialists' practice of using trusts-legal arrangements where someone is given ownership of property to hold solely for another's benefit-to consolidate separate companies into large conglomerates. In the United States and Canada, and to a lesser extent in the European Union, the modern law governing monopolies and economic competition is known by its original name, "antitrust law". A survey of 568 member economists of the American Economic Association (AEA) in 2011 found a near-universal consensus, in that 87 percent of respondents broadly agreed with the statement "Antitrust laws should be enforced vigorously." Nomenclature One view suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while a broad range of legal and economic theory sees the role of antitrust laws as also controlling economic power in the public interest. Some economists argue that antitrust laws actually impede competition, and may discourage businesses from pursuing activities that would be beneficial to society. The scope of antitrust laws, and the degree to which they should interfere in an enterprise's freedom to conduct business, or to protect smaller businesses, communities and consumers, are strongly debated. state governments may also enforce their own antitrust laws, which mostly mirror federal antitrust laws, regarding commerce occurring solely within their own state's borders. Criminal antitrust enforcement is done only by the Justice Department's Antitrust Division. Civil antitrust enforcement occurs through lawsuits filed by the Federal Trade Commission, the United States Department of Justice Antitrust Division, and private parties who have been harmed by an antitrust violation. įederal antitrust laws provide for both civil and criminal enforcement. Third, Section 2 of the Sherman Act prohibits monopolization. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that may substantially lessen competition or tend to create a monopoly. First, Section 1 of the Sherman Act prohibits price fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. antitrust statutes are the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914. In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies. " The Bosses of the Senate", an 1889 political cartoon by Joseph Keppler depicting corporate interests-from steel, copper, oil, iron, sugar, tin, and coal to paper bags, envelopes, and salt-as giant money bags looming over the tiny senators at their desks in the Chamber of the United States Senate. For antitrust law globally, see Competition law.
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