WHAT IS THE SHERMAN ANTI-TRUST ACT?
The Sherman Antitrust Act is a USA Federal law prohibiting
any contract, trust, or conspiracy in restraint of interstate
or foreign trade..
Sherman Act also provides that no person shall monopolize, attempt
to monopolize or conspire with another to monopolize interstate
or foreign trade or commerce. A felony, an individual violating
these laws may be jailed for up to three years and fined up to
$350,000 per violation. Corporations may be fined up to $10 million
Section 1 of the Sherman Act outlaws "every contract, combination
. . . , or conspiracy, in restraint of trade," but long ago,
the Supreme Court decided that the Sherman Act prohibits only
those contracts or agreements that restrain trade unreasonably.
What kinds of agreements are unreasonable is up to the courts.
2 of the Sherman Act makes it unlawful for a company to "monopolize,
or attempt to monopolize," trade or commerce. As that law
has been interpreted, it is not necessarily illegal for a
company to have a monopoly or to try to achieve a monopoly
position. The law is violated only if the company tries to
maintain or acquire a monopoly position through unreasonable
methods. For the courts, a key factor in determining what
is unreasonable is whether the practice has a legitimate business
Section 5 of the Federal Trade Commission Act outlaws "unfair
methods of competition" but does not define unfair. The Supreme
Court has ruled that violations of the Sherman Act also are
violations of Section 5, but Section 5 covers some practices
that are beyond the scope of the Sherman Act. It is the FTC’s
job to enforce Section 5.
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