Introduction

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INTRODUCTION

A. History of U.S. Antitrust Law

Today’s system of antitrust laws and regulations originated in the

late 19th century, when business and industry in the United States

experienced major changes. America’s many small railroads began to

consolidate into vast systems, and large manufacturing conglomerates

began to emerge, wielding great economic power. As the increasingly

monopolistic tendencies of business “trusts”—such as Standard Oil

Company and U.S. Steel—stifled competition in a number of major

industries, public concern intensified. Recognizing the need to regulate

and preserve competition in the open markets, the U.S. government

enacted three sets of laws, collectively known as the antitrust laws, to

restrict the kinds of business practices that restrain trade or lessen

competition—the Sherman Antitrust Act (Sherman Act),1followed by

the Federal Trade Commission Act (FTC Act), 2and the Clayton

Antitrust Act (Clayton Act).3Still in effect today and enforced primarily

by the Federal Trade Commission (FTC) and the Antitrust Division of

the Department of Justice (DOJ), the antitrust laws have maintained the

same principal purpose for over one hundred years: to protect

competition for the benefit of consumers, thereby keeping prices low and

keeping quality high.4

Almost unanimously, Congress passed the first of the three antitrust

laws, the Sherman Act, in 1890. This landmark federal statute prohibits

any agreements that unreasonably restrain trade as well as any

monopolization and abuse of monopoly power. Certain agreements

among competitors are deemed illegal “per se” because they are

inherently harmful to competition; these include agreements to fix prices,

divide markets, and rig bids. Courts have also recognized violations of

the Sherman Act under the “rule of reason.”5This tes t looks to the

1. 15 U.S.C. §§ 1-7.

2. Id. §§ 41-58.

3. Id. §§ 12-27; 29 U.S.C. §§ 52-53.

4. Fed. Trade Comm’n, The Antitrust Laws, GUIDE TO ANTITRUST LAWS,

available at http://www.ftc.gov/tips-advice/competition-guidance/guide-

antitrust-laws/antitrust-la ws.

5. See Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 66

(1911).