ANSWERED Write a short report about antitrust laws in the United States. Describe the Sherman Act.

Antitrust laws are a group of laws that prohibit the formation of monopolies and unfair business practices in the United States. They promote competition between businesses and restrict any kind of behavior that is beneficial to only a few entities while being detrimental to the consumer and/or the country’s economy.

Before the government passed antitrust laws, corporate “trusts” were rampant in the American economy. Shareholders of various firms would transfer their shares to trustees in exchange for certificates that gave them a share in the collective income of the jointly managed firms. This misuse of corporate trusts spread across industries, encouraging monopolies that benefitted only the stakeholders and not the overall economy.

Competition in business is necessary for the health and growth of any economy because it benefits not only the market, but also the consumers. The antitrust laws curtail business practices that can harm the market or consumers. There are antitrust laws at the federal as well as state levels. Violations of antitrust laws can attract civil and criminal penalties.

The US government passed its first antitrust act in 1890. It was the Sherman Act, named after Senator John Sherman (who authored the act). The Act prohibits trade practices that encourage a monopoly in the market. The Federal Trade Commission Act and Clayton Act, both introduced in 1914, were further additions to US antitrust laws.

Two agencies handle antitrust violations at the national level: the Department of Justice and the Federal Trade Commission. At the state level, the respective state attorney general handles antitrust civil suits. Citizens can also file suit against any company that they believe has breached the antitrust laws.