United States antitrust Competition law

senatorial round house thomas nast, 1886

the sherman act of 1890 attempted outlaw restriction of competition large companies, co-operated rivals fix outputs, prices , market shares, through pools , later through trusts. trusts first appeared in railroads, capital requirement of railroad construction precluded competitive services in scarcely settled territories. trust allowed railroads discriminate on rates imposed , services provided consumers , businesses , destroy potential competitors. different trusts dominant in different industries. standard oil company trust in 1880s controlled number of markets, including market in fuel oil, lead , whiskey. vast numbers of citizens became sufficiently aware , publicly concerned how trusts negatively impacted them act became priority both major parties. primary concern of act competitive markets should provide primary regulation of prices, outputs, interests , profits. instead, act outlawed anticompetitive practices, codifying common law restraint of trade doctrine. prof rudolph peritz has argued competition law in united states has evolved around 2 conflicting concepts of competition: first of individual liberty, free of government intervention, , second fair competitive environment free of excessive economic power. since enactment of sherman act enforcement of competition law has been based on various economic theories adopted government.

section 1 of sherman act declared illegal every contract, in form of trust or otherwise, or conspiracy, in restraint of trade or commerce among several states, or foreign nations. section 2 prohibits monopolies, or attempts , conspiracies monopolize. following enactment in 1890 court applies these principles business , markets. courts applied act without consistent economic analysis until 1914, when complemented clayton act prohibited exclusive dealing agreements, particularly tying agreements , interlocking directorates, , mergers achieved purchasing stock. 1915 onwards rule of reason analysis applied courts competition cases. however, period characterized lack of competition law enforcement. 1936 1972 courts application of anti-trust law dominated structure-conduct-performance paradigm of harvard school. 1973 1991, enforcement of anti-trust law based on efficiency explanations chicago school became dominant, , through legal writings such judge robert bork s book antitrust paradox. since 1992 game theory has been used in anti-trust cases.