Sherman Antitrust Act(redirected from Sherman Act)
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Sherman Antitrust Act,1890, first measure passed by the U.S. Congress to prohibit trusts; it was named for Senator John ShermanSherman, John,
1823–1900, American statesman, b. Lancaster, Ohio; brother of William Tecumseh Sherman. He studied law, was admitted (1844) to the bar, and practiced law several years in Mansfield, Ohio, before he moved (1853) to Cleveland.
..... Click the link for more information. . Prior to its enactment, various states had passed similar laws, but they were limited to intrastate businesses. Finally opposition to the concentration of economic power in large corporations and in combinations of business concerns led Congress to pass the Sherman Act. The act, based on the constitutional power of Congress to regulate interstate commerce, declared illegal every contract, combination (in the form of trust or otherwise), or conspiracy in restraint of interstate and foreign trade. A fine of $5,000 and imprisonment for one year were set as the maximum penalties for violating the act.
The Sherman Act authorized the federal government to institute proceedings against trusts in order to dissolve them, but Supreme Court rulings prevented federal authorities from using the act for some years. As a result of President Theodore Roosevelt's "trust-busting" campaigns, the Sherman Act began to be invoked with some success, and in 1904 the Supreme Court upheld the government in its suit for dissolution of the Northern Securities Company. The act was further employed by President Taft in 1911 against the Standard Oil trust and the American Tobacco Company.
In the Wilson administration the Clayton Antitrust ActClayton Antitrust Act,
1914, passed by the U.S. Congress as an amendment to clarify and supplement the Sherman Antitrust Act of 1890. It was drafted by Henry De Lamar Clayton.
..... Click the link for more information. (1914) was enacted to supplement the Sherman Antitrust Act, and the Federal Trade CommissionFederal Trade Commission
(FTC), independent agency of the U.S. government established in 1915 and charged with keeping American business competition free and fair. The FTC has no jurisdiction over banks and common carriers, which are under the supervision of other governmental
..... Click the link for more information. (FTC) was set up (1914). Antitrust action sharply declined in the 1920s, but under President Franklin Delano Roosevelt new acts supplementary to the Sherman Antitrust Act were passed (e.g., the Robinson-Patman ActRobinson-Patman Act,
passed by the U.S. Congress in 1936 to supplement the Clayton Antitrust Act. The act, advanced by Congressman Wright Patman, forbade any person or firm engaged in interstate commerce to discriminate in price to different purchasers of the same commodity when
..... Click the link for more information. ), and antitrust action was vigorously resumed. As a result of a suit filed in 1974 under the Sherman Antitrust Act, the American Telephone and Telegraph (AT&T) monopoly was broken up in 1982.
The Hart-Scoss-Rodino Antitrust Improvement Act (1976) made it easier for regulators to investigate mergersmerger,
in corporate business, fusion of two or more corporations by the transfer of all property to a single corporation. The remaining corporation continues in existence, having absorbed the other(s).
..... Click the link for more information. for antitrust violations, but few mergers were blocked during the merger boom of the 1980s, when the FTC and Justice Dept. adopted a looser interpretation of antitrust legislation. By the 1990s, still a time of large corporate mergers, the FTC became more litigious in antitrust actions, and the Justice Dept. aggressively pursued the Microsoft Corp. (see Gates, BillGates, Bill
(William Henry Gates 3d), 1955–, American business executive, b. Seattle, Wash. At the age of 19, Gates founded (1975) the Microsoft Corp., a computer software firm, with Paul Allen. They began by purchasing the rights to convert an existing software package.
..... Click the link for more information. ). Antitrust legislation is primarily regulated by the Antitrust Division of the Dept. of Justice and the FTC. U.S. corporations with international operations also face antitrust scrutiny from European UnionEuropean Union
(EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community (EC), an economic and political confederation of European nations, and other organizations (with the same member nations)
..... Click the link for more information. regulators.
See R. Posner, Anti-Trust Law (1976); R. Bork, The Antitrust Paradox (1978).
Sherman Antitrust Act
a law adopted in the USA in 1890; named after the initiator of the measure, Senator J. Sherman. It was adopted in response to pressure from an antimonopolistic movement of workers and farmers. The act declared illegal any combination in the form of a trust or otherwise, as well as any agreement aimed at restraint of trade. In practice, however, the act failed to impede the operations of the trusts or even to prevent the formation of new trusts. Of five lawsuits brought against trusts from 1892 to 1896, four were decided in favor of the trusts. At the same time one of the provisions of the act—that providing for legal responsibility for inflicting damage to the property of an organization or individual—was used to persecute trade unions and fight the strike movement. From 1890 to March 1897, the US Supreme Court alone pronounced 12 judgments against workers’ unions.