Along with the Sherman Antitrust Act of 1890, the Clayton Antitrust Act protected competition in the marketplace by proscribing various anticompetitive business practices. It also exempted certain union activities from antitrust prosecution, preserving the ability of unions to exert reasonable pressure on employers during negotiations.
During the initial period following the enactment of the first federal antitrust law, the Sherman Antitrust Act of 1890, the law proved to be a disappointment to those who were anticipating its expansive and vigorous enforcement. The American economy was beset by a wave of corporate mergers between 1895 and 1905, leading to renewed concerns about greater concentration of power among fewer firms in various industries. Another disquieting development occurred with the emergence of the “rule of reason” standard of proof in antitrust cases. In the 1911 case
As a consequence of these concerns, antitrust policy emerged as a major issue in the presidential election of 1912. All three principal candidates–Democrat Woodrow
The Clayton Antitrust Act explicitly prohibited price discrimination, exclusive dealing, and tying–or the anticompetitive linking of a sale price to the purchase of other commodities. The act also outlawed mergers between firms that threatened substantially to lessen competition or to create a monopoly within an industry. If these practices reduced competition, they were rendered illegal by the act whether or not they were “reasonable” from a business perspective. In addition, the new statute exempted labor unions from antitrust regulation and expanded the availability of treble damages and injunctive relief to private plaintiffs who brought civil antitrust lawsuits.
Hovenkamp, Herbert. Federal Antitrust Policy: The Laws of Competition and Its Practice. 3d ed. St. Paul: West, 1994. Kinter, Earl W. The Legislative History of the Federal Antitrust Laws and Related Statutes. New York: MacMillan, 1978.
Federal Trade Commission
National Labor Relations Board
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Sherman Antitrust Act
Supreme Court and commerce
Supreme Court and labor law