Sherman Antitrust Act - Essay Example

Antitrust laws were created to prevent businesses that got extraordinarily large from blocking competition and abusing of their power. The antitrust laws look for to make businesses compete fairly, the Sherman Act, Clayton Act, and the Robinson-Patman the enabling legislation for the Federal Trade Commission.

            The Sherman Antitrust Act prohibits contracts, combinations, and conspiracies in restraint of interstate commerce and actual or attempted monopoly of interstate business by one or more people. On the other hand, the Clayton Act as amended by the Robinson Patman Act prohibits any individual involved in interstate business from carrying out price alienation among Clients that cannot be proven by differences in production costs, transportation costs, or other differences costs, entering into exclusive dealing or tying arrangements that suppress interstate trade and effecting any combination the effect of which might be to substantially make competition less. In 1914, Congress enacted two new antitrust laws. These were the federal trade commission Act that manifested the federal trade commission and gave the authority to enforce U.S. antitrust laws. Clayton antitrust act was intended to supplement and strengthen the enforcement of antitrust laws. It led to the introduction of new forms of prohibited activities like mergers and acquisitions that they affect may substantially lessen competition and gave the state attorneys the capacity in enforcing the federal antitrust laws. The majority of states including Washington have enacted their antitrust laws that prohibit anticompetitive actions affecting business within their states and increase enforcement of federal antitrust laws.

            Antitrust laws are enforced by the public and private sectors. The United States Department of Justice antitrust division and the federal trade commission divide the responsibility for investigating and litigating cases under the Sherman Act, and they also consider potential anticompetitive mergers under the Clayton Act. In the private sector, any person that is injured in his business or property by a violation of antitrust laws is at liberty to bring an action in court. A prevailing plaintiff is entitled to recover treble damages, costs of suits, and also attorney’s fees. The private parties are sanctioned to obtain injunctive help to prevent threatened damages or losses. Most antitrust lawsuits are mostly by private litigants in search of damages for breach of federal and state antitrust laws. The Sherman Act is not explicit about the prohibited conduct. On the Other hand, the Clayton Act is a bit particular about activities that may be illegal. However, only when such conduct substantially lessens competition or leads to the creation of a monopoly in any line of commerce neither it is defined in the status.

            Selling gasoline for less than cost violates the act because, Section 1 of the Sherman Act contracts, partnerships, or conspiracies in restraint of trade, prohibits every contract, combination, in the form of trust or otherwise or conspiracy in restraint of trade or commerce among the several states or with foreign nations. A restraint of trade can be defined as an agreement between two or more individuals or entities that affect the process of competition. On the other hand, under this approach also contracts for the purchase and sale of a single good might appear to be prohibited by antitrust laws. It violates the law of price fixing this is an agreement between competitors to build, lower, or stabilize the cost estimates or any other competitive rates that shall be offered for their products or services. Market or customer quota means an agreement among businesses not to compete for customers this will be violated. In some cases, limited none compete agreements may be allowed when the agreements are ancillary to a larger transaction.

Section 2 of the Sherman Act –Monopolization

            In the struggle to gain market share, businesses at times might develop forms of regulation or methods that go beyond competition on the merits and might harm or destroy normal competition. Occasionally such conduct may be justifiable if it is innovative and benefits consumers. Antitrust laws operate to forbid such conduct. This means businesses are forbidden from being involved in competitive unreasonable conduct that may result in giving the business control over prices, restricting output, and involvement in other anticompetitive conduct in the market. Section 2 of the Sherman Act prohibits businesses from monopolizing, or attempting to monopolize. This means that businesses are forbidden from engaging in other anticompetitive conduct. Effective antitrust enforcement requires public support. Public ignorance and apathy can hugely weaken antitrust enforcement. Every citizen should report any encounter of business behavior that violates antitrust laws.