Sherman Act Clayton Act Research Paper

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U.S. laws

There are a number of different laws that govern fair, balanced and competitive practices. One major category is the antitrust laws. Antitrust laws seeks to create a competitive environment by preventing companies from obtaining the ability to abuse their market positions. Ensuring that each industry and market has a healthy amount of competition has been the work of a series of acts that govern antitrust practices.

The most significant piece of antitrust legislation is the Sherman Act, which was passed in 1890 in order to define antitrust activities. The act was passed in response to monopoly abuses on the part of a number of companies, and the recognition that a successful capitalist economy required at least enough market intervention on the part of government to prevent the formation of unnatural monopolies (FTC, 2014).

There have been subsequent laws that have enhanced the Sherman Act, and refined it, largely because the original act left the courts a lot of leeway in interpretation. The Federal Trade Commission Act was passed in 1914, creating the FTC as an enforcement body to regulate trade in the U.S., and the Clayton Act was also passed in 1914. The Clayton Act enhanced the Sherman Act, by prohibiting mergers and acquisitions that would create an uncompetitive environment, and by prohibiting interlocking directorships that would create a de facto monopoly, if not a de jure one (FTC, 2014).

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Clayton Act cases are frequently the subject of antitrust action today, and firms are often forced to divest assets during a merger in order to received approval.

Some other laws prescribe the terms of competition for companies. These laws are created to protect consumers. An example of such a law is the Robinson-Patman Act, which prohibits many forms of price discrimination (FTC, 2014, 2). In particular, price discrimination that is intended to harm competitors is subject to restrictions under this act, so if price discrimination seems to target a specific industry sector where there is a competitor.

There are other laws that fit within the scope of providing for fair, balanced and competitive practices, including some under trade laws, and in particular trade agreements. These can be subject to the specifics of a specific law, like NAFTA, but they include concepts like anti-dumping legislation. The General Agreement on Trade & Tariffs of 1994, for example, prohibits dumping, which is selling in a foreign market below cost (OUSTR, 2014). While many laws such as the Sherman Act are largely domestic in nature, that has necessitated that there are specific laws written into international trade agreements to ensure competitive practices are followed in international trade….....

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