at reduce price or improve quality, and the detriments of market power that can lead to higher prices or reduced innovation. Corporate trusts grew rapidly in the US from 1880 to 1905, creating the atmosphere for President Theodore Roosevelt to launch his now famous trust busting campaigns. The era of antitrust legislation stems from the Sherman Act of 1890. The antitrust laws were based on the constitutional power of Congress to regulate interstate commerce. It declared illegal every contract, combination, or conspiracy in restraint of interstate and foreign trade. The Sherman Act makes monopolization illegal. The two elements of monopolization are: "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of the power as distinguished from growth or development as a consequence of a superior product, business acumen, or historical accident." 1 The Sherman Act was designed to eliminate restraints on trade and competition. It is the main source of antitrust law.While the Sherman Act provided protection against monopolies, Congress determined that it wasnt quite comprehensive in its self. It was supplemented in 1914 by the Clayton Antitrust Act, which prohibited exclusive sales contracts, inter-corporate stockholdings, and unfair price-cutting to freeze out competitors. The Clayton Act of Seal Straugh1914 makes price discrimination illegal, forbids tying arrangements involving only goods and makes anti-competitive mergers and acquisitions illegal. The Sherman and Clayton Antitrust Acts were made to promote competition between companies making similar products.2 To assure the effectiveness of these laws, the Federal Trade Commission Act of 1914 established the body of overseers that govern unfair and unlawful trade practices. The provision surrounding unfair price cutting was strengthened under the terms of the Robinson-Patman Act of 1936. 3There have been many amendments to these l...
