1. Antitrust laws purport to prevent monopolies and encourage competition. However, since their advent
in 1890, history has shown that they do not prevent monopoly, but, in fact, foster it by limiting
competition. These laws permit the federal government to regulate and restrict business activities,
including pricing, production, product lines, and mergers, ostensibly in order to prevent monopolies and
stimulate competition. In actual fact, government has been the source of monopoly through its grants of
legal privilege to special interests in the economy. The social cure for such « coercive » monopoly is
deregulation and repeal of the antitrust laws
Antitrust law refers to the regulation of unfair business practices that inhibit free trade and healthy
competition between companies that occupy the same industry market sector as consumers are
protected from being burdened with unreasonable profit-making measures, such as price gouging.
Regulations also prohibit predatory pricing, which is the practice of reducing the price of goods or
services so much that existing market rivals may be forced to fold and new competitors are obstructed
from entering the market at all.
The 1st antitrust laws were passed in a climate of fear an d mistrust of big firms.
The US antirust laws are the legal embodiment of our nations commitment to a free market economy.
The Sherman Antitrust Act, which was passed in 1890, was the first law passed by the United
States Congress to restrict monopolies. A monopoly occurs when a single company or group of
cooperative companies have control over a certain business or aspect of the economy. An
arrangement by which the stockholders of several different companies entrust their controlling
shares of stocks to a board of trustees is known as a trust, and often results in a monopoly being
formed, as the trust has excessive control over an industry. The Sherman Antitrust Act was
intended to foster competition by preventing trusts from forming and artificially reducing supply
and increasing prices of various products and services. Monopolies were perceived as a threat to
the proper functioning of the American economy, so the Sherman Antitrust Act was put into
effect. The Sherman Antitrust Act stated that any agreements that unfairly restricted competition
and affected interstate commerce were considered illegal. It also stated that forming or trying to
form a monopoly over a given good or service was considered illegal. Subsequent antitrust acts,
such as the Clayton Antitrust Act, add further restrictions on mergers, pricing, and related
business-related issues.
Henry G. Manne, « Mergers and the Market for Corporation Control », Journal of Political Economy 73,
No. 2, April, 1965.
John B. Ridpath, « The Philosophical Origins of Antitrust », The Objectivist Forum, June, 1980.

2. Antitrust law seeks to make enterprises compete fairly. It has had a serious effect on business
practices and the organization of U.S. industry. Premised on the belief that free trade benefits the
economy, businesses, and consumers alike, the law forbids several types of restraint of trade and
monopolization. These fall into four main areas: agreements between or among competitors,
contractual arrangements between sellers and buyers, the pursuit or maintenance of Monopoly
power, and mergers.
The Sherman Anti-Trust Act of 1890 (15U.S.C.A. § 1 et seq.) is the basis for U.S. antitrust law,
and many states have modeled their own statutes upon it. As weaknesses in the Sherman Act
became evident, Congress added amendments to it at various times through 1950. The most
important are the Clayton Act of 1914 (15 U.S.C.A. § 12 et seq.) and the Robinson-Patman Act
of 1936 (15 U.S.C.A. § 13 et seq.). Congress also created a regulatory agency to administrate and
enforce the law, under the Federal Trade Commission Act of 1914 (15 U.S.C.A. §§ 41–58). In an
ongoing analysis influenced by economic, intellectual, and political changes, the U.S. Supreme
Court has played the leading role in shaping the ways in which these laws are applied.
Enforcement of antitrust law depends largely on two agencies: the Federal Trade Commission
(FTC), which may issue cease-and-desist orders to violators, and the Antitrust Division of the
U.S. DEPARTMENT OF JUSTICE (DOJ), which can litigate. Private parties may also bring civil suits.
Violations of the Sherman Act are felonies carrying fines of up to $10 million for corporations,
and fines of up to $350,000 and prison sentences of up to three years for persons. The federal
government, states, and individuals may collect treble (i.e., triple) the amount of damages that
they have suffered as a result of injuries
Dabbah, Maher M. 2003. The Internationalisation of Antitrust Policy. New York: Cambridge
Univ. Press.
The Sherman Act and Early Enforcement
In 1890, Congress took aim at the trusts with passage of the Sherman Anti-Trust Act,
named for Senator John Sherman (R-Ohio). It went far beyond the common law's refusal
to enforce certain offensive contracts. Clearly persuaded by the more restrictive view that
saw great harm in restraint of trade, the Sherman Act outlawed trusts altogether. The
landmark law had two sections. Section 1 broadly banned group action in agreements,
forbidding "[e]very contract, combination in the form of trust or otherwise, or
conspiracy," that restrained interstate or foreign trade. Section 2 banned individuals from
monopolizing or trying to monopolize. Violations of either section were punishable by a
maximum fine of $50,000 and up to one year in jail. The Sherman Act passed by nearly
unanimous votes in both houses of Congress