Antitrust Laws in United States
Practical Information
Note: Some of this information was last updated in 1982
Legislation that forbids monopolistic trade practices and prohibits conspiracies and trusts that restrain interstate commerce (in U.S. law).
What is Antitrust Laws?
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Labor and the Antitrust Laws
United States Constitution
According to theEncyclopedia of the American Constitution, about its article titled LABOR AND THE ANTITRUST LAWSProblems relating to the application of antitrust law to labor result from a basic incompatibility between two public policies: the first, embodied in the sherman act of 1890, prohibits efforts by anyone to monopolize or restrain competition in the product market; the
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Enforcement of Antitrust Laws
Introduction to Antitrust Laws
The basic purpose of the antitrust laws is to create and maintain conditions of competition in industry and commerce. The effectiveness of these laws depends essentially on the way in which the laws are interpreted by the federal judiciary, and the vigor with which an administration in power seeks their enforcement. The initiative for enforcement comes from the U.S. Department of Justice, headed by the attorney general, a cabinet-level official. Ultimately, therefore, the president is responsible for determining if antitrust enforcement will be vigorous or lax. Since 1890 attitudes of both the courts and presidents toward the antitrust laws have fluctuated widely.
The first major court decision involving a trust came two decades after the passage of the Sherman Act. In 1911, in a landmark case, the U.S. Supreme Court found that unlawful monopoly power existed in both the Standard Oil Company and the American Tobacco Company; these companies were then ordered dissolved into smaller, competing firms. Prior to this case, the courts had allowed manufacturing trusts to continue on the grounds that Congress intended the Sherman Act to apply only to interstate commerce. In its decision the Court established the “rule of reason” principle with respect to industrial combinations. Congress, according to the Court, only intended that “unreasonable” combinations in restraint of trade be illegal under the Sherman Act. This doctrine gave the Antitrust Division of the Justice Department and the courts both flexibility and discretion in passing on business practices that might violate antitrust statutes.
Since 1911 the courts have not been consistent in their interpretation of the meaning of monopoly power under the Sherman Act. In the early 1920s, for example, in a case involving the United States Steel Corporation, the Supreme Court held that the mere existence of monopoly power, if not abused, did not constitute a violation of the Sherman Act. Later, however, in the Aluminum Company of America (ALCOA) case (1945), the Court reversed its position; it ruled that ALCOA was a monopoly, but it did not order the company dissolved. Pure monopoly, apart from public utilities, is rare in the American economy, and more recent cases under the Sherman Act have involved either oligopolies (industries operated by a very few firms) or mergers of conglomerates. Since the Supreme Court has not developed a legal philosophy capable of coping with the immense economic power inherent in many situations, the Court continues to wrestle with problems that are posed by the existence of giant corporations.
Attitudes of government officials charged with enforcing antitrust laws have also changed over the years. President Theodore Roosevelt gained political fame as a “trustbuster” through vigorous enforcement of the Sherman Act. In the 1920s antitrust activity languished, but it was revived again during President Franklin D. Roosevelt’s administrations. In 1938 Roosevelt launched a far-reaching investigation into monopoly in the economy; more than 80 antitrust suits were filed in 1940 as a result of this investigation. Activities in this area were slowed during World War II.
None of the postwar administrations was inclined toward vigorous antitrust enforcement, although suits were filed against such well-known corporations as International Business Machines, General Mills, and General Foods. No new, clear-cut principles of antitrust law emerged from any of these cases, some of which were settled out of court or won by the defendants. A suit against American Telephone and Telegraph, however, led to its Court-ordered reorganization in 1984. Seven independent regional companies were created to handle local telephone service. AT&T continues as a competitor with other companies for long-distance business.
Recently ambivalence has grown among lawyers, economists, and business executives with respect to the effectiveness of the nation’s antitrust laws. Some of this stems from the belief that the growth of multinational firms and worldwide competition makes concern about concentration in the domestic market less important. Other experts suggest that a vigilant antitrust stance is essential if price fixing and horizontal-type mergers that reduce competition in certain industries are to be prevented.” (1)
Antitrust Laws: Summary
In this entry, Antitrust Laws covers:
- The Sherman Act and the Clayton Antitrust Act
- Exemptions from the Antitrust Laws
- Interpretation of the Antitrust Laws
- Market Definition and Scope
- Conscious Parallelism
- Mergers and Acquisitions
- Other Antitrust Laws
- The International Reach of U.S. Antitrust Laws
Antitrust Laws: Main Elements
The coverage of Antitrust Laws includes the following main elements:
The Sherman Act and the Clayton Antitrust Act
Find out an overview of this topic, in relation to Antitrust Laws, in the legal Ecyclopedia.
Exemptions from the Antitrust Laws
There is information on this basic subject in the legal Ecyclopedia.
Interpretation of the Antitrust Laws
Find out an overview of this issue following this link (topic).
Market Definition and Scope
There is information on this basic subject matter in this legal reference.
Conscious Parallelism
Find out an overview of this topic in the legal Ecyclopedia.
Mergers and Acquisitions
There is information on this basic subject in this reference work.
Other Antitrust Laws
For information on this issue, please click here (subject).
The International Reach of U.S. Antitrust Laws
There is information on this basic subject matter in this legal reference.
References
See Also
- Business Law
The International Reach of U.S. Anti
trust Laws
Leading Case Law
Among the main judicial decisions on this topic:
F. Hoffman-La Roche Ltd. v. Empagran S.A.
Information about this important court opinion is available in this American legal Encyclopedia.
References
See Also
- Business Law
- Antitrust Laws
Resources
Notes and References
- Information about Antitrust Laws in the Encarta Online Encyclopedia
Guide to Antitrust Laws
National Cooperative Research and Production Act
Find more information on National Cooperative Research and Production Act in relation to the Antitrust Implications of Doing Business Overseas in the legal Encyclopedias.
Antitrust laws in the Americas
Find more information on Antitrust laws in the Americas in relation to the Global Corporate Antitrust Compliance for Entities Operating Abroad in the legal Encyclopedias.
Antitrust laws and the International Trade Law
Antitrust Laws: Summary
In this entry, Antitrust Laws covers:
- The Sherman Act and the Clayton Antitrust Act
- Exemptions from the Antitrust Laws
- Interpretation of the Antitrust Laws
- Market Definition and Scope
- Conscious Parallelism
- Mergers and Acquisitions
- Other Antitrust Laws
- The International Reach of U.S. Antitrust Laws
Antitrust Laws: Main Elements
The coverage of Antitrust Laws includes the following main elements:
The Sherman Act and the Clayton Antitrust Act
Find out an overview of this topic, in relation to Antitrust Laws, in the legal Ecyclopedia.
Exemptions from the Antitrust Laws
There is information on this basic subject in the legal Ecyclopedia.
Interpretation of the Antitrust Laws
Find out an overview of this issue following this link (topic).
Market Definition and Scope
There is information on this basic subject matter in this legal reference.
Conscious Parallelism
Find out an overview of this topic in the legal Ecyclopedia.
Mergers and Acquisitions
There is information on this basic subject in this reference work.
Other Antitrust Laws
For information on this issue, please click here (subject).
The International Reach of U.S. Antitrust Laws
There is information on this basic subject matter in this legal reference.
References
See Also
- Business Law
The International Reach of U.S. Antitrust Laws
Leading Case Law
Among the main judicial decisions on this topic:
F. Hoffman-La Roche Ltd. v. Empagran S.A.
Information about this important court opinion is available in this American legal Encyclopedia.
References
See Also
- Business Law
- Antitrust Laws
Resources
See Also
Further Reading
- Antitrust laws entry in the Dictionary of International Trade Law (Raj Bhala)
- Antitrust laws entry in the Gale Encyclopedia of U.S. Economic History (Thomas Carson; Mary Bonk)
- Antitrust laws entry in the Dictionary of International Trade
- Antitrust laws entry in the Dictionary of International Trade: Handbook of the Global Trade Community (Edward G. Hinkelman)
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