antitrust - ANTITRUST LAW Legislation enacted by the...

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ANTITRUST LAW Legislation enacted by the federal and various state governments to regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies, to promote competition, and to encourage the production of quality goods and services at the lowest prices, with the primary goal of safeguarding public welfare by ensuring that consumer demands will be met by the manufacture and sale of goods at reasonable prices. Antitrust law seeks to make businesses compete fairly. It has had a serious effect on business practices and the organization of U.S. industry. Premised on the belief that free trade benefits the economy, businesses, and consumers alike, the law forbids several types of restraint of trade and monopolization. These fall into four main areas: agreements between competitors, contractual arrangements between sellers and buyers, the pursuit or maintenance of monopoly power, and mergers. The Sherman Anti-Trust Act of 1890 (15 U.S.C.A. § 1 et seq.) is the basis for antitrust law, and many states have modeled their own statutes upon it. As weaknesses in the Sherman Act became evident, Congress added amendments to it at various times through 1950. The most important are the Clayton Act of 1914 (15 U.S.C.A. § 12 et seq.) and the Robinson-Patman Act of 1936 (15 U.S.C.A. § 13 et seq.). Congress also created a regulatory agency to administrate and enforce the law, under the Federal Trade Commission Act of 1914 (15 U.S.C.A. §§ 41--58). In an ongoing analysis influenced by economic, intellectual, and political changes, the U.S. Supreme Court has had the leading role in shaping how these laws are applied. Enforcement of antitrust law depends largely on two agencies, the Federal Trade Commission (FTC), which may issue cease and desist orders to violators, and the U.S. Department of Justice's Antitrust Division, which can litigate. Private parties may also bring civil suits. Violations of the Sherman Act are felonies carrying fines of up to $10 million for corporations, and fines of up to $350,000 and prison sentences of up to three years for persons. The federal government, states, and individuals can collect triple the amount of damages they have suffered as a result of injuries. Origins Antitrust law originated in reaction to a public outcry over trusts, which were late-nineteenth- century corporate monopolies that dominated U.S. manufacturing and mining. Trusts took their name from the quite legal device of business incorporation called trusteeship, which consolidated control of industries by transferring stock in exchange for trust certificates. The practice grew out of necessity. Twenty-five years after the Civil War, rapid industrialization had blessed and cursed business. Markets expanded and productivity grew, but output exceeded demand and competition sharpened. Rivals sought greater security and profits in cartels (mutual agreements to fix prices and control output). Out of these arrangements sprang the trusts. From sugar to whiskey to beef
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This note was uploaded on 11/21/2011 for the course GEN 105 taught by Professor Adams during the Spring '08 term at University of Phoenix.

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antitrust - ANTITRUST LAW Legislation enacted by the...

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