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United States antitrust law

In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses in order to promote competition and prevent unjustified monopolies. The three main U.S. antitrust statutes are the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914. These acts serve three major functions. First, Section 1 of the Sherman Act prohibits price fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that may substantially lessen competition or tend to create a monopoly. Third, Section 2 of the Sherman Act prohibits monopolization.[2]

Federal antitrust laws provide for both civil and criminal enforcement. Civil antitrust enforcement occurs through lawsuits filed by the Federal Trade Commission, the United States Department of Justice Antitrust Division, and private parties who have been harmed by an antitrust violation. Criminal antitrust enforcement is done only by the Justice Department's Antitrust Division. Additionally, U.S. state governments may also enforce their own antitrust laws, which mostly mirror federal antitrust laws, regarding commerce occurring solely within their own state's borders.


The scope of antitrust laws, and the degree to which they should interfere in an enterprise's freedom to conduct business, or to protect smaller businesses, communities and consumers, are strongly debated. Some economists argue that antitrust laws actually impede competition,[3] and may discourage businesses from pursuing activities that would be beneficial to society.[4] One view suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while a broad range of legal and economic theory sees the role of antitrust laws as also controlling economic power in the public interest.[5] Surveys of American Economic Association members since the 1970s have shown that professional economists generally agree with the statement: "Antitrust laws should be enforced vigorously."[list 1]

Nomenclature[edit]

In the United States and Canada, and to a lesser extent in the European Union, the modern law governing monopolies and economic competition is still known by its original name, "antitrust law", but in most other countries it is now called "competition law" or "anti-monopoly law". The term "antitrust" came from late 19th-century American industrialists' practice of using trusts—legal arrangements where someone is given ownership of property to hold solely for another's benefit—to consolidate separate companies into large conglomerates.[11] These "corporate trusts" died out in the early 20th century as U.S. states passed laws making it easier to create new corporations.

, 273 U.S. 392 (1927) per se illegality of price fixing

United States v. Trenton Potteries Co.

, 288 U.S. 344 (1933)

Appalachian Coals, Inc. v. United States

, 310 U.S. 150 (1940)

United States v. Socony-Vacuum Oil Co.

, 384 U.S. 597 (1966) 5 to 4, the FTC was entitled to get an injunction to prevent the completion of a merger, between milk selling competitors in the Chicago area, before its competitive effects are determined by a court

FTC v. Dean Foods Co

, 556 F.2d 682 (2d Cir. 1977) injunction issued against merger of the NBA with the ABA

Robertson v. National Basketball Association

, 394 U.S. 131 (1969) failing company defense

Citizen Publishing Co. v. United States

, 479 U.S. 104 (1986) private enforcement

Cargill, Inc. v. Monfort of Colorado, Inc

§8, interlocking directorates

Clayton Act 1914

, 193 U.S. 197 (1904) 5 to 4, a railway monopoly, formed through a merger of 3 corporations was ordered to be dissolved. The owner, James Jerome Hill was forced to manage his ownership stake in each independently.

Northern Securities Co. v. United States

, 196 U.S. 375 (1905) the antitrust laws entitled the federal government to regulate monopolies that had a direct impact on commerce

Swift & Co. v. United States

, 221 U.S. 1 (1911) Standard Oil was dismantled into geographical entities given its size, and that it was too much of a monopoly

Standard Oil Co. of New Jersey v. United States

, 221 U.S. 106 (1911) found to have monopolized the trade.

United States v. American Tobacco Company

, 148 F.2d 416 (2d Cir. 1945) a monopoly can be deemed to exist depending on the size of the market. It was generally irrelevant how the monopoly was achieved since the fact of being dominant on the market was negative for competition. (Criticised by Alan Greenspan.)

United States v. Alcoa

, 351 U.S. 377 (1956), illustrates the cellophane paradox of defining the relevant market. If a monopolist has set a price very high, there may now be many substitutable goods at similar prices, which could lead to a conclusion that the market share is small, and there is no monopoly. However, if a competitive price were charged, there would be a lower price, and so very few substitutes, whereupon the market share would be very high, and a monopoly established.

United States v. E. I. du Pont de Nemours & Co.

, 903 F.2d 659 (9th Cir. 1990) necessity of barriers to entry

United States v. Syufy Enterprises

, 342 U.S. 143 (1951) attempted monopolization

Lorain Journal Co. v. United States

, 743 F.2d 1114 (1985)

United States v. American Airlines, Inc.

, 506 U.S. 447 (1993) in order for monopolies to be found to have acted unlawfully, action must have actually been taken. The threat of abusive behavior is insufficient.

Spectrum Sports, Inc. v. McQuillan

, 284 F.3d 47 (1st Cir. 2002) there could be no unlawful monopolization of the soccer market by MLS where no market previously existed

Fraser v. Major League Soccer

334 U.S. 100 (1948) four cinema corporations secured exclusive rights from distributors, foreclosing competitors. Specific intent to monopolize is not required, violating the Sherman Act §§1 and 2.

United States v. Griffith

, 347 U.S. 521 (1954) exclusionary behavior

United Shoe Machinery Corp v. U.S.

, 384 U.S. 563 (1966) Grinnell made plumbing supplies and fire sprinklers, and with affiliates had 87% of the central station protective service market. From this predominant share there was no doubt of monopoly power.

United States v. Grinnell Corp.

Professional Real Estate Investors, Inc., v. Columbia Pictures, 508 U.S. 49 (1993)

Allied Tube v. Indian Head, Inc., 486 U.S. 492 (1988)

FTC v. Superior Ct. TLA, 493 U.S. 411 (1990)

, 405 U.S. 233 (1972). Case held that the FTC is entitled to bring enforcement action against businesses that act unfairly, as where supermarket trading stamps company injured consumers by prohibiting them from exchanging trading stamps. The FTC could prevent the restrictive practice as unfair, even though there was no specific antitrust violation.

FTC v. Sperry & Hutchinson Trading Stamp Co.

; Shapiro, Carl (2000). "Antitrust Policy: A Century of Economic and Legal Thinking" (PDF). Journal of Economic Perspectives. 14 (1): 43–60. doi:10.1257/jep.14.1.43. Archived (PDF) from the original on 2022-10-09.

Kovacic, William E.

Millon, David (1990). . Washburn Law Journal. 29: 141–49.

"The First Antitrust Statute"

Orbach, Barak; Rebling, Grace Campbell (2012). . Southern California Law Review. 85 (3): 605–656.

"The Antitrust Curse of Bigness"

W Adams and JW Brock, Antitrust Economics on Trial: Dialogue in New Learning (Princeton 1991)  0-691-00391-2.

ISBN

P Areeda and L Kaplow, Antitrust Analysis: Problems, Texts, Cases (1997)

O Black, Conceptual Foundations of Antitrust (2005)

The Antitrust Paradox (Free Press 1993) ISBN 0-02-904456-1.

RH Bork

Choi, Jay Pil (ed.) (2007). Recent Developments in Antitrust: Theory and Evidence. . ISBN 978-0-262-03356-5. {{cite book}}: |first= has generic name (help)

The MIT Press

Antonio Cucinotta, ed. Post-Chicago Developments in Antitrust Law (2003)

David S Evans. Microsoft, Antitrust and the New Economy: Selected Essays (2002)

'Chicago and Its Alternatives' (1986) 6 Duke Law Journal 1014–1029

Herbert Hovenkamp

John E Kwoka and Lawrence J White, eds. The Antitrust Revolution: Economics, Competition, and Policy (2003)

CJ Goetz, FS McChesney and TA Lambert, Antitrust Law, Interpretation and Implementation (5th edn 2012)

B Orbach and G Campbell, , Southern California Law Review (2012).

The Antitrust Curse of Bigness

Antitrust Law: An Economic Perspective (1976)

RA Posner

ET Sullivan, H Hovenkamp and HA Shlanski, Antitrust Law, Policy and Procedure: Cases, Materials, Problems (6th edn 2009)

United States Department of Justice Antitrust Division homepage

United States Federal Trade Commission: Antitrust and Competition division

Official European Union Antitrust site

Canadian Competition Bureau