“anti-trust act”

law enacted to clarify and strengthen the Sherman Antitrust Act (1890). The vague language of the latter had provided large corporations with numerous loopholes, enabling them to engage in certain restrictive business arrangements which, though not illegal per se, resulted in concentrations that had an adverse effect on competition. Whereas the Sherman Act declared monopoly illegal, the Clayton Act defined in some detail varied types of illegal business practices that are conducive to the formation of monopolies or that result from them. Certain forms of holding companies and interlocking directorates are forbidden, as are discriminating freight agreements and the distribution of sales territories among so-called natural competitors. Two sections of the Clayton Act were later amended by the Robinson-Patman Act, 15 U.S.C. § 13c (1936), and the Celler-Kefauver Act, 15 U.S.C. § 18 (1950), to fortify its provisions. The Robinson-Patman Act, 15 U.S.C. §§ 13–13b, 21a (1988), made more enforceable section 2, which relates to price and other forms of discrimination among customers. The Celler-Kefauver Act strengthened section 7, prohibiting one firm from securing either the stocks or physical assets (i.e., plant and equipment) of another firm when the acquisition would reduce competition.

curbed concentrations of power that interfere with trade and reduce competition. One of its main provisions outlawed all combinations that restrained trade between states or with foreign nations. This prohibition applied not only to formal cartels but also to any agreement to fix prices, limit industrial output, share markets, or exclude competition. A second key provision made illegal all attempts to monopolize any part of trade or commerce in the United States. These two provisions, which comprise the heart of the Sherman Act, are enforceable by the Department of Justice through litigation in the federal courts. Firms found in violation of the Act can be ordered dissolved by the courts, and injunctions to prohibit illegal practices can be issued. Violations are punishable by fines and imprisonment. Moreover, private parties injured by violations are permitted to sue for triple the amount of damages done to them. In 1914 Congress passed two legislative measures that provided support for the Sherman Act. One of these was the Clayton Antitrust Act, which elaborated on the general provisions of the Sherman Act and specified many illegal practices that either contributed to or resulted from monopolization. The other measure created the Federal Trade Commission, providing the government with an agency that had the power to investigate possible violations of antitrust legislation and issue orders forbidding unfair competition practices.