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 Register. The United States Department of Justice. Company Profiles. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.
These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification.
I Accept Show Purposes. Your Money. Federal Law Feeling the push of populist pressure, Congress passed two landmark pieces offederal legislation.
Utilizing its constitutional power to regulate interstate business, it first put in effect the Interstate Commerce Act of , which required the railroads to maintain fair rates and to cease discrimination. Three years later came the passage of the Sherman Anti-Trust Act of , a sweeping assault on the trusts that remains the basis of federal antitrust lawtoday. The Sherman Anti-Trust Act forbade the formation of trusts, monopolies, and, generally, the restraint of free trade.
Allowing both criminal and civil prosecution of offenders, the law placed special emphasis on civil lawsuits by authorizing the award of triple the amount of damages suffered. Although seeming to usher in a new era in business regulation, antitrust lawwas sluggishly enforced and quickly hit judicial roadblocks. Knight , where the majority ruled that manufacturing was not a form of interstate business.
The Courttherefore held that the law did not apply to a trust which refined over 98 percent of the nation's sugar. Only in the late s did the Court uphold prosecutions, first against the railroads. Yet even in Standard Oil Co. United States , the Court championed the Sherman Anti-Trust Act, holding that it did not ban all restraints upon trade, but only ones foundto be anticompetitive.
Moreover, lower courts were still free to interpret cases subjectively according to the "rule of reason". Antitrust Enforcements Impatience with these rulings and the slow pace of enforcement led to furtherreforms in Congress clarified the law with an explicit new statute, the Clayton Act, which spelled out four illegal anticompetitive practices.
It prohibited discriminating by selling the same product or service at differentprices to similar buyers, forcing buyers to enter exclusive contracts, dominating markets through corporate mergers, and sharing common board members between competing companies. Yet even the Clayton Act still left much uncertain,emphasizing that its forbidden practices were only illegal if the effect "maybe substantially to lessen competition" or "tend to create a monopoly.
The Federal Trade Commission Act also showed the unwillingness of Congress to be too specific about antitrust, aiming broadly at "unfair methods of competition. In , the Robinson-Patman Act tightened the earlier law's ban on price discrimination. The last major piece of federal legislation was the Celler-Kefauver Antimerger Actof , which closed loopholes in the Clayton Act's restriction on mergers,preventing anticompetitive purchases of rival businesses' assets and deceitful transfers of stock purchases.
Throughout the twentieth century, Congress has done less to influence antitrust law than have the executive and the judicial branches. Federal enforcement, which belongs to the FTC and the Justice Department, depends entirely on the political mood of a given presidential administration. President Theodore Roosevelt, a self-declared "trustbuster," made vigorous enforcement a priorityat the turn of the century, as did his successor, William Howard Taft.
The pendulum swung in the s under the noninterventionist policies of PresidentCalvin Coolidge, and then back again in the s when President Franklin D. Roosevelt hotly pursued monopolies. Even in recent decades, politics have governed enforcement. The deregulatory Reagan era had little taste for antitrust cases, but the Clinton years have shown a renewed appetite. At all times, the Supreme Court has had the most definitive influence.
This reflects a kindof legislative design, as Congress intentionally crafted the outline rather than the details of antitrust law. Through a vast body of federal cases, the Court has filled in the blanks with a complex set of rules, exceptions and doctrines. And yet its approach has been in nearly constant flux.
Monopoly Cases For monopoly cases, the Court has used vastly different yardsticks. Early on,the majority in United States v. Steel Corp. About Us Gibbs Law Group is a California-based law firm committed to protecting the rights of clients nationwide who have been harmed by corporate misconduct. We represent individuals, whistleblowers , employees , and small businesses across the U. Our award-winning lawyers have achieved landmark recoveries and over a billion dollars for our clients in high-stakes class action and individual cases involving consumer protection , data breach, digital privacy, and federal and California employment lawsuits.
This field is for validation purposes and should be left unchanged.
0コメント