Notes On Laws

The Sherman Antitrust Act is the first antitrust legislation to be passed by the United States Congress.
It was introduced during the term of US President Benjamin Harrison (1870s to 1900) also when the United
States experienced great transformation in the economy, government, and technology.
The law was named after Ohio politician, John Sherman, who was an expert in trade and commerce regulation.
The law to prevent the concentration of power into the hands of a few large enterprises to the disadvantage of
smaller enterprises.
The Sherman Antitrust Act is divided into the following three sections:
Section One: Anti-competitive practices that restrain trade - Some of the practices may include agreements to fix
prices, exclude certain competitors, and limit production outputs, as well as combinations to form cartels. (an association of
manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition )
Section Two: Prohibits monopolization or attempts to monopolize trade or commerce : To prohibit business
practices that attempt to monopolize the market, as well as anti-competitive agreements that push small
enterprises and new entrants out of the market.
For example, large companies in the railroad industry merged to form strong conglomerates that would
dominate the market.
Section Three: District of Columbia and US Territories
• Clayton Antitrust Act, law enacted in 1914 by the United States Congress to clarify and strengthen the
Sherman Antitrust Act (1890).
• The Clayton Act and other antitrust and consumer protection regulations are enforced by the Federal Trade Commission.
• After the enactment of the Sherman Act in 1890, regulators found that the act contained certain weaknesses that made it
impossible to fully prevent anti-competitive businesses practices in the United States.
• The Clayton Antitrust Act sought to address the weaknesses in the Sherman Act by expanding the list of prohibited
business practices that would prevent a level playing field for all businesses. Some of the practices that the law focuses on
include
1. price fixing (Price fixing refers to an agreement between market participants to collectively raise, lower, or stabilize
prizes to control supply and demand. The practice benefits the individuals or firms involved in setting the price and
hurts consumers and firms on the receiving end.),
2. exclusive dealings,
3. price discrimination(Price discrimination refers to a pricing strategy that charges consumers different prices for
identical goods or services.), and unfair business practices.
Tying is the practice of selling one product or service as a mandatory addition to the purchase of a
different product or service.
Interlocking directorates is a business practice wherein a member of one company's board of directors also serves on
another company's board or within another company's management.
Intercorporate investment occurs when a company makes an investment in another company.
• the section of the Federal Trade Commission Act prohibiting:
• Unfair methods of competition.
• Unfair or deceptive acts or practices in market place.
• The act was thus designed to achieve two related goals: fair
competition between businesses and protection of consumers against
fraudulent business practices.
• It specifically barred the use of deceptive or false advertising.
• The Robinson-Patman Act is part of the antitrust legislation found in the
Clayton Act of 1914.
• Large corporations and businesses receive substantial discounts from their
wholesale suppliers. If smaller businesses do not receive the same discounts, they
cannot offer the same products at competitive prices. Eventually, these small
businesses will be forced out of the market.
• also called Anti-Price Discrimination Act, that protects small businesses from being
driven out of the marketplace by prohibiting discrimination in pricing,
promotional allowances, and advertising by large franchised companies.
• The Robinson-Patman Act is also intended to protect wholesalers from being
excluded from the purchasing chain. Wholesalers do not want such franchises
bypassing them to buy products directly from manufacturers.
• The Celler-Kefauver act is prevent mergers that could possibly result
in reduced competition.
• To prevent conglomerate mergers by forbidding companies from
buying assets from competitors when it would result in reduced
competition.
• This act marked an important step in stamping out greedy corporate
behavior.
consumer good pricing act
• The effect of fair trade laws has been to eliminate price competition,
legalize price fixing and raise the cost to the consumer of a number
of commodities such as radio and television equipment, major house
appliances, drugs, books, hardware, clothing and shoes.
• A security is a financial investment. Usually, a corporation offers a
security in order to raise capital for their business. A stock is an
example of a security. Bonds, mortgages and loan packages may also be
securities. Securities are a way of financing a business enterprise or
making an investment in a business.
• The investors who buy a security hope to profit from the transaction.
The corporations who sell securities want to raise money. Securities are
an important part of business. Security laws ensure that this aspect of
business operates fairly to all involved in the buying and selling of
securities. Most securities are public offerings, but a security may also
be private with a limited group of investors.

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The Sherman Antitrust Act is the first antitrust legislation to be passed by the United States Congress.

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