Antitrust: an overview
Trusts and monopolies are concentrations of wealth in the hands
of a few. Such conglomerations of economic resources are thought to be
injurious to the public and individuals. This is because such trusts minimize,
if not obliterate normal marketplace competition, and yield undesirable price
controls. These, in turn, cause markets to stagnate and sap individual
To prevent trusts from creating restraints on trade or commerce, and
reducing competition, Congress passed the Sherman Antitrust Act in 1890.
The Sherman Act was designed to maintain economic liberty, and to eliminate
restraints on trade and competition. The Sherman Act is the main source
of Antitrust law.
The Sherman Act is a Federal statute, and as such, has a scope limited
by Constitutional constraints on the Federal government, but the Commerce
clause allows for a very wide interpretation and application of this act:
The Act applies to all transactions and business involved in interstate
commerce, or if the activities are local, affecting interstate commerce.
The latter phrase has been interpretted to allow broad application of the
Most if not all states have comparable statutes prohibiting monopolistic
conduct, price fixing agreements, and other acts in restraint of trade
having strictly local impact.
The Pillars of Antitrust Law
Sherman Antitrust Act (1890) outlawed trusts and prohibited "illegal"
monopolies. A trust was a relationship between businesses which teamed
up through anti-competitiv e agreements to gain market dominance. In the
early 1900's, Standard Oil Co. and the American Tobacco Co. were prosecuted
under the Sherman Antitrust Act.
Clayton Antitrust Act (1914) issued further laws that outlawed: price
fixing, abusing power to create or maintain a monopoly, and "interlinking"
of companies that share d board of directors.
Federal Trade Commission Act (1914) created the Federal Trade Commission
which duties were to prevent unfair methods of competition in business.
Current Issues and New Obstacles
One of the primary concerns of our current market economy is whether the
FTC and DOJ's antiquated and beurotic means of prosecuting companies under
antitrust laws can withstand the fast paced computer market, and how the
laws and their enforceme nts must be adapted to handle an industry that
did not even exist when antitrust laws were first created.
Does antitrust law comute? Can government
regulate anticompetitive practices in a digital age? Online Exchange
Does antitrust law have a
place in the computer industry? Legal Bytes