Antitrust Law
The historic goal of antitrust laws is to protect economic freedom and opportunity by promoting competition in the marketplace. Competition in a free market benefits American consumers through lower prices, better quality and greater choice. Competition provides businesses the opportunity to compete on price and quality, in an open market and on a level playing field, unhampered by anticompetitive restraints. Competition also tests and hardens American companies at home, the better to succeed abroad.
The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power.
The Sherman Act
In 1890, Congress passed the Sherman Antitrust Act, preventing trusts from creating restraints on trade or commerce and reducing competition. The Sherman Act was intended 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 is limited by Constitutional constraints on the Federal government. However, 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. If the activities are local, the act applies to transactions affecting interstate commerce. The latter phrase has been interpretted to allow broad application of the Sherman Act. Most states have similar statutes against monopolistic conduct, price fixing agreements, and other actions in supressing trade with strictly local impact.
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