Introduction
Since the late nineteenth century, the federal government has challenged business practices and mergers that create or may create a monopoly in a particular market. Federal legislation has varied in effectiveness in terms of preventing anti-competitive mergers.
Antitrust law is enacted by the federal and various state governments to (1) regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies; (2) promote competition; and (3) encourage the production of quality goods and services with the primary goal of safeguarding public welfare by ensuring that consumer demands will be met by the manufacture and sale of goods at reasonable prices.
Antitrust law seeks to make enterprises compete
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ANTITRUST LAWS AND CASES
Sherman Anti-Trust Act
The Sherman Antitrust Act (15 U.S.C.A. § 1 et seq.) was the first federal antitrust statute. SEC. 1, 2, and 3, stated that every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce is declared to be illegal; and person who shall monopolize, or attempt to monopolize or combine or conspire with any other person or persons shall be deemed guilty. The Act also entitled to create Federal Trade Commission, and to define its powers and duties. However, its application to mergers and acquisitions has varied, depending on its interpretation by the U.S. Supreme Court.
Northern Securities Co. v. United States: Petition under the Sherman Act file March 10, 1902, in the Circuit Court, District of Minnesota, against the Northern Securities Company had acquired and was
The Sherman Act was created in 1890 had two major provisions which was to prohibit conspiracies to restrain trade and also to outlaw monopolization. In 1914 the Clayton Act was passed to expand off of the Sherman Act. The Clayton
The Celler-Kefauver Act of 1950 (which is an Amendment to the Clayton Act of 1914)
During the Progressive Era, Regulatory Agencies fail to provide and do their work, legislation ere made with the purpose for the common good of the citizen that suffer from the big corporation abuse, most of the corporation state strict rule but never got to accomplish them or the personal was too much expensive. The Supreme Court during the United State v Knight Company state diminished the effectiveness of the Sherman Anti-Trust act by ruling that manufacturing was not an interstate commerce (Document 5). The Federal Trade Commission, an independent agency of the United State government, established in by the Federal Trade Commission Act. Its principal mission was the promotion of consumer protection and the elimination/prevention of anti-competitive
The antitrust laws are the basis of this national policy. These laws, enforced by both the federal and state governments, require companies to compete in the marketplace. The Sherman Act, the first federal "antitrust law," was enacted in 1890, at a time when there was enormous concern about "trusts" -- combinations of companies that were able to control entire industries. Since then, other laws have been enacted to supplement the Sherman Act, including the Federal Trade Commission Act and the Clayton Act (1914). With some revisions, these laws still are in effect today. They have the same basic objective: making sure there are strong economic incentives for businesses to operate efficiently, keep prices down, and keep quality up.
The scope of this paper is to break down and define social regulation, industrial regulation, and natural monopolies by explaining how they have impacted society and why they exist. It is also the intent to summarize the Antitrust Laws, explain the major functions of the five primary federal regulatory commissions that govern social regulation, and identify three main regulatory commissions of industrial regulation.
Events that led to the creation of the FTC. July 2, 1890, the Sherman Anti-Trust Act was the first law passed by congress to prevent monopolistic business practices. Named after Senator John Sherman of Ohio, he had this law to pass the senate with a unanimous vote of 51-1 and the House with a vote of 242-0. President Harrison signed it into law in 1890. The Sherman Anti-Trust Act authorized government to make it illegal to make a “restraint of trade or commerce among the several states or with foreign nations”. Those that did not abide by this law resulted in a $5,000 fine and a year in prison. “The Sherman Act was designed to reestablish competition but was loosely worded and unsuccessful to define terms as “trust,” “combination,” “conspiracy,” and “monopoly” (www.ourdocuments.gov, 2013)”. Because of this “loosely worded” act, the Supreme Court prevented the federal government from using the act for many years up until President Theodore Roosevelt came along with his “trust-busting” campaigns. In 1904 the Supreme Court finally supported the government in its suit for “termination of the Northern Securities Company and the act was further employed by President Taft in 1911 against the
A preliminary question is what is antirust liability? While there are other statutes, the Sherman Antitrust Act is the signature law prohibiting antitrust activity. The act defines antitrust activity as any “restraint of trade or commerce.” It also prevents persons from monopolizing or attempting to monopolizing trade. The act is only concerned with restrains of trade that are “unreasonably restrictive of competitive conditions.” A secondary requirement is that there be “concerted action,” which requires more than unilateral behavior by individual actors. Examples of antitrust violations include price-fixing, allocations of territory or customers, and exclusive dealing agreements. Antitrust laws can be enforced either through actions brought by
The Sherman Antitrust Act is a law that Congress passed to prevent any one company from gaining a monopoly over a market. Additionally, this law helps protect new businesses from being crushed by larger corporations. For example, when the government stepped in to force Pac Bell Telphone Services to separate due to the company having to much control of the market. Now, these anti-trust laws are easily enforced in the present day, however in the early 19th-century lack of technology and payoffs made the implantation of these statutes tough. For example, when a large corporation wanted to buy a smaller one they could simply use a shell corporation to make the purchase without anyone being able to link the acquisition back to the original company.
Due to many events of corruption within the economic system of America, the government was starting to fear that these ultra-powerful corporations was starting to interfere with the system of free competition among businesses, and free trade between the states. To help bring these institutions under control, Congress first passed the Sherman Antitrust Act in the year of 1890. It basically stated that no company or corporation was allowed to compromise between trusts or agreements that would mess up the system of free trade between states and other countries. Along with this, the federal government attempted to prosecute many industries in the Supreme Court, motivating Rockefeller to back down and get rid of his trusts. Unfortunately, this new
Antitrust law in the United States is a collection of federal and state government laws regulating the conduct and organization of business corporations with the intent to promote fair competition in an open-market economy for the benefit of the public. Congress passed the first antitrust statute, the Sherman Antitrust Act, in 1890 in response to the public outrage toward big business. In 1914, Congress passed two additional antitrust laws: the Federal Trade Commission Act and the Clayton Act. (The Antitrust Laws. Web.)
The Sherman Antitrust Act was enacted on July 2nd, 1890 which prohibits activities that restrict interstate commerce and competition in the marketplace.
I claim that the Sherman Antitrust Act is a critical and necessary statute that gradually caused significant changes in business practices in order to ensure a competitive free market system essential for long term growth of the economy, although it faced criticisms for sacrificing economic efficiency. This fundamental statute continues to notably shape the economic landscape even today, albeit being more than 100 years old.
The anti-trust laws were set in place to promote vigorous competition but also to protect the consumer from unfair mergers and business practices. The first antitrust law that was passed by Congress is called the Sherman Act and is a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade” according to www.FTC.gov . Later in 1914 Congress passed two more laws, one creating the Federal Trade Commission Act (FTCA) and then the Clayton Act, which now create the three core federal antitrust laws that are still active currently. Although they have changed over the last hundred years, they still have the same concept: “to protect the process of competition for the benefit of consumers,
This strategy started under the Reagan administration since they did not enforce U.S. anti-trust law “restricted managers ability to merge and consolidate monopolistic firms” (Schaeffer, 49). The Reagan administration viewed mergers and monopolies as a good thing. They argued that these mergers play important role in the economy and if there is ineffective management or redeployment of assets the companies can be penalize. Nevertheless, the government adopted policies in 1980, which allow more than 1,565 mergers that equal to be worth 32.9 billion and double value within a couple of years. During the next administration under George H. W. Bush they adopted similar policies and the chain toward Bill Clinton administration allowing mergers to continue plus arguing that the anti-trust laws were out dated. “There has been a sea-change in (federal government) attitudes towards large mergers” (Schaeffer,
The Sherman Anti-Trust is not explicit in its terms and it is not clear whether a trust is illegal or preventing competition is. In Section one of the act, it says that a trust has to also be “in restraint of trade or commerce among the several states, or with foreign nations” to fully be declared illegal. Even in section two of the act, it states,” Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other 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” (Cornell). The lines “among the several states” can be used as a