Federal law outlawing a combination of interests such as a trust or a conspiracy that attempts to unreasonably constrain trade among states or with foreign nations.
From early in its history, the United States maintained a widespread fear of the commercial monopoly the concentration of economic power in the hands of a few which could be used to oppress individuals and injure the public.
Congress responded a decade later with the passage of the Interstate Commerce Act
The Sherman Antitrust Act arises from the commerce clause of the Constitution. Thus, interpretation and application of the act was concurrent with the evolution of federal commercial law. Specifically, whether litigation fell within its parameters was largely determined by the Court’s definition of what constituted commerce.
Within five years of the act’s passage, the Court heard United States v. E. C. Knight Co.
Harlan’s view ultimately prevailed in Addyston Pipe and Steel Co. v. United States
Court decisions continued to sustain the complete and paramount character of federal power to regulate commerce among the states and, concurrently, strengthened the authority of the Sherman Antitrust Act. Applicability of the act was notably expanded when, in Swift and Co. v. United States
By 1944 the Court had determined that the commercial authority of Congress was a positive power to legislate concerning transactions that affect people in more than one state. Indictments underlying United States v. South-Eastern Underwriters Association
Application of the Sherman Antitrust Act is fact specific, and therefore, lower federal trial courts have articulated the majority of case law. As the United States grew in commercial sophistication and case law increased in volume, these lower courts deciphered the distinction between reasonable business practices and monopolistic endeavors. Ultimately, this balancing of corporate enterprise and fair business practices spawned greater clarity of antitrust legislation through congressional adoption of the Clayton Act
However, the Court remains the ultimate authority in determining the constitutional scope and course of antitrust law. The Court held that the first two sections of the Sherman Antitrust Act embrace every conceivable act that might come within the spirit of the prohibitions the act was meant to address. For example, it applies to both tangible and intangible products, such as stock sales.
Specifically, section 1 forbids all means of monopolizing trade, that is, unduly restraining trade by means of contracts and combinations. A restraint of interstate commerce produced by peaceable persuasion is as much within the prohibition of the act as one accomplished by force. Section 2 condemns the result to be achieved rather than the business practice used. A violation of this section requires the possession of a monopoly within the relevant market and the willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.
Kintner, Earl W., ed. Federal Antitrust Laws and Related Statutes: A Legislative History. Buffalo, N.Y.: William S. Hein, 1978. Shenefield, John H. The Antitrust Laws: A Primer. 3d ed. Washington, D.C.: American Enterprise Institute, 1998. Sherman, Roger. Antitrust Policies and Issues. Reading, Mass.: Addison-Wesley, 1978. Walker, Albert H. History of the Sherman Law of the United States of America. Westport, Conn.: Greenwood, 1980.
Commerce, regulation of
E. C. Knight Co., United States v.
Interstate Commerce Commission (ICC)
Munn v. Illinois
South-Eastern Underwriters Association, United States v.
Standard Oil Co. v. United States
Swift and Co. v. United States