The Sherman Antitrust Act was not designed to prevent healthy monopolistic competition but to target monopolies that resulted from a deliberate attempt to dominate the marketplace. Antitrust laws refer broadly to the group of state and federal laws designed to ensure that businesses are competing fairly. These laws exist to promote competition among sellers, limit monopolies, and give consumers options.
Supporters say these laws are necessary for an open marketplace to exist and thrive. Competition is considered healthy for the economy , giving consumers lower prices, higher-quality products and services, more choice, and greater innovation. However, opponents argue that allowing businesses to compete as they see fit—instead of regulating competition—would ultimately give consumers the best prices.
The Sherman Antitrust Act is divided into three key sections:. The act received immediate public approval. But because the legislation's definition of concepts such as trusts, monopolies, and collusion was not clearly defined, few business entities were actually prosecuted under its measures. It also closed loopholes that the Sherman Act established, including those that dealt specifically with anti-competitive mergers, monopolies, and price discrimination.
For example, the Clayton Act prohibits appointing the same person to make business decisions for competing companies. The Sherman Antitrust Act was born against a backdrop of increasing monopolies and abuses of power by large corporations and railroad conglomerates. Congress passed the Interstate Commerce Act in in response to increasing public indignation about abuses of power and malpractices by railroad companies. Its purpose was to regulate interstate transportation entities.
The ICC had jurisdiction over U. During the first half of the 20th century, Congress consistently expanded the ICC's power so much that, despite its intended purpose, some believed that the ICC was often guilty of assisting the very companies it was tasked to regulate by favoring mergers that created unfair monopolies.
The Gilded Age, which spanned from the s to about , was dominated by political scandal and robber barons , the growth of railroads, the expansion of oil and electricity, and the development of America's first giant national and international corporations. The Gilded Age was an era of rapid economic growth. Corporations took off during this time, in part because they were easy to register and, unlike today, did not have to pay any incorporation fees.
Lateth-century legislators' understanding of trusts is different from our current concept of the term. During that time, trusts became an umbrella term for any sort of collusive or conspiratorial behavior that was seen to render competition unfair. The term trust has evolved over the years, though. Today, it refers to a financial relationship in which one party gives another the right to hold property or assets for a third party. On Oct.
Department of Justice filed an antitrust lawsuit against Google , alleging that the online giant engaged in anti-competitive conduct to preserve monopolies in search and search advertising. Deputy Attorney General Jeffrey Rosen compared the complaint to past uses of the Sherman Act to stop monopolistic practices by corporations.
The Sherman Antitrust Act is a law passed by Congress to promote competition within the economy by prohibiting companies from colluding or merging to form a monopoly. The Sherman Antitrust Act was passed to address concerns by consumers who felt they were paying high prices on essential goods and by competing companies who believed they were being shut out of their industries by larger corporations. Those found guilty of violating the Sherman Act can face a hefty punishment.
It is also a criminal law, and offenders may serve prison sentences of up to 10 years. In some cases, heftier fines could also be issued, worth twice the amount the conspirators gained from the illegal acts or twice the money lost by the victims. Many household names have been hit with antitrust suits based in part on the Sherman Act. Other than Google, in recent years Microsoft and Apple have both faced complaints, with the former accused of seeking to create a monopoly in Internet browser software and the latter of unethically raising the price of its e-books and, in later years, exploiting the market power of its app store.
The Clayton Act was introduced later, in , to address some of the specific practices that the Sherman Act did not clearly prohibit or failed to properly clarify. The Sherman Act, the first of its kind, was deemed too vague, allowing some companies to find ways to maneuver around it. Essentially, the Clayton Act deals with similar topics, such as anti-competitive mergers, monopolies, and price discrimination but adds more detail and scope to eliminate some of the previous loopholes. Over the years, antitrust laws continue to be amended to reflect the current business environment and fresh observations.
Federal Trade Commission. Corporate Finance Institute. The federal government utilized this legislation throughout the late s and the s to break up monopolies, including that of the Standard Oil Company in Numerous Americans feared the growing number of companies, like Standard Oil, that dominated the marketplace, preventing competitors from organizing.
These same people also often objected to the poor treatment of workers by these various businesses. Many Americans believed that businessmen had created virtual monopolies off of the hard work of their workers. Any inconsistencies are attributable to the original source. Abbott Laboratories v. Schechter Poultry Corp.
Hampton Jr. Western Pacific Railroad Co. United States. Sunstein Federalist No. Epstein Office of Management and Budget. Voter information What's on my ballot? Where do I vote? How do I register to vote? How do I request a ballot? When do I vote? When are polls open?
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