Section 7 of the clayton act allows greater regulation of mergers than just sherman act section 2, since it does not require a mergertomonopoly before. In 1914, congress passed two additional antitrust laws. The cellerkefauver act targets mergers where companies purchase suppliers, and. Some of these general practices regulated by the clayton act are. The clayton act enacted in 1914 wanted government to have the ability to attack a business practice early in its use to prevent a firm from becoming a monopoly as well as.
The key pieces of antitrust legislation in the united statesthe sherman antitrust act of 1890 and the clayton act of 1914contain broad language that has afforded the courts wide. The clayton antitrust act is an amendment passed by u. Apr 07, 2020 the clayton antitrust act, passed in 1914 by the united states congress, was one in a series of laws developed in the united states to address fair market competition and the need for regulation of business in response to the economic booms of the industrial age. Clayton antitrust act article about clayton antitrust. A concise history of corporate mergers and the antitrust laws in the united states mergers. Clayton antitrust act legal definition merriamwebster law. Before the clayton antitrust act of 1914, there was the sherman antitrust act. The sherman antitrust act was rather vaguely worded that enabled a businessman to engage in restrictive trade practices adversely affecting competition. Some sections have been edited or eliminated because of space concerns. The sherman antitrust act of 1890 was the first such law. By the turn of the 20th century, large corporations had cornered whole segments of americas economy using predatory pricing, exclusive dealings, and anticompetitive mergers to drive local businesses to ruin.
Mergers are simplest antitrust situation to analyze because we can compare pre and post outcomes. The clayton antitrust act of 1914, was a part of united states antitrust law with the goal of adding further substance to the u. United states code title 15 commerce and trade chapter 1 monopolies and combinations in restraint of trade. One of the important new freedom progressive reforms, attacks against unfair business practices and federal laws.
International antitrust enforcement assistance act of 1994, 15 u. The clayton antitrust act of 1914, codified at 15 u. The clayton act, authored by alabama congressman henry clayton, outlawed, among other things, anticompetitive mergers and acquisitions, interlocking directorates, and price discrimination. By 1914, senator william thompson kansas found that over 9,877 previously. The clayton anti trust act of 1914 was an addition to the sherman antitrust act of 1890 that protected consumers against harmful, anticompetitive business arrangements such as monopolies and cartels by defining prohibitions and an enforcement scheme. In the 1880s, hundreds of small shortline railroads were being bought up and consolidated into giant systems. Pdf this article analyzes the evolution of antitrust law known as competition law in. The clayton antitrust act us house of representatives. Passed in 1890, the first law to restrict monopolistic trusts and business combinations. The clayton antitrust act 1 the clayton antitrust act united states congress 1 overview the clayton antitrust act 1914 forbade several practices that destroyed competition or prevented new businesses from forming. The governments case against the proposed union of the second and fourth largest wireless carriers in the us draws heavily from the familiar arsenal of antitrust weapons against anticompetitive. Note also that a, b, and 21a comprise the robinsonpatman price discrimination act 1936.
The clayton antitrust act of 1914, was enacted on october 15, 1914, with a goal of strengthening provisions of the sherman antitrust act. Congress in 1914, meant to further promote competition in u. The clayton antitrust act attempts to prohibit certain actions that lead to anticompetitiveness. The clayton act prohibited corporations from acquiring the stock of another if doing so would create a monopoly. Clayton antitrust act summary, history, significance. The united states congress passed the cellerkefauver act in 1950 with the goal of strengthening the provisions of the clayton antitrust act of 1914. Clayton antitrust act project gutenberg selfpublishing.
Act passed in 1914, which outlawed such practices as price discrimination charging different customers different prices for the same goods, tying agreements that. The clayton act also specified that labor unions and farm organizations not only had a right to exist. The act also legalized peaceful strikes and boycotts against companies. Specifically, the act was enacted to seal a loophole in the clayton act regarding certain forms of mergers and acquisitions. The clayton antitrust act provides barriers to a broad range of anticompetitiveness issues. Clayton act 100th anniversary symposium federal trade. Debs clayton anti trust act the clayton antitrust act of. The major sections of the act are so broad that one could find almost any business activity to be illegal. It was followed by the sherman antitrust act of 1890, the clayton antitrust act of 1914 and the federal trade commission act of 1914, the robinsonpatman act of 1936, and the cellerkefauver act of 1950. The department of justices complaint emphasizes the traditional elements of a claim arising under section 7 of the clayton antitrust act of 1914. Clayton act section 7 1914 merger law no person engaged in commerce shall aquire the capital of another where the effer of such an aquisition, in any line of commerce, in any section of the country, may be to substantially lessen competition or tend to create monopoly.
Sherman act and the 1914 clayton act, which have been refined through. Aug 31, 2017 the clayton antitrust act was part of the early 20thcentury efforts to curb the power of big businesses. It extended the sherman antitrust act of 1890, acting as one of the governments chief weapons against trusts. The clayton act sought to enhance and address weaknesses in the sherman act by preventing such unfair or anti. Congress in 1914 that provides further clarification and substance to the sherman antitrust act of 1890 on topics. Enacted in 1890, the sherman act had been the first federal law intended to protect consumers by outlawing monopolies, cartels, and trusts. On this date, the 63rd congress 191915 passed the clayton antitrust act p. This act prohibited price discrimination, price fixing, and exclusive sales contracts. Section 7 of the clayton act prohibits mergers and acquisitions when the effect may be substantially to lessen competition, or to tend to create a monopoly. Enacted in 1890 it was fairly limited in scope and was intended to prohibit unscrupulous business. Ftc jointly enforce the clayton act, the primary federal merger enforcement statute. In september of 1914, president woodrow wilson addressed the teamsters convention.
This event was a major milestone for tobin and the teamsters. Although a frequent critic of the president during his first two years in the white house, wilson graciously thanked tobin for his role in the 1912. The clayton antitrust act, passed in 1914 by the united states congress, was one in a series of laws developed in the united states to address fair market competition and the need for regulation of business in response to the economic booms of the industrial age. The key question the agency asks is whether the proposed merger is likely to create or enhance market power or facilitate its exercise.
The purpose of the clayton act was to give more enforcement teeth to the sherman antitrust act. Congress responded to populist antitrust sentiments and deficiencies in the sherman antitrust act of 1890 with a new act. Sherman act 7 foreign trade antitrust improvements act of 1982, 15 u. The greatest antitrust concern arises with proposed. Although a frequent critic of the president during his first two years in the white house, wilson graciously thanked tobin for his role. Passed in 1914, the clayton act regulates general practices that may be detrimental to fair competition. What is the clayton antitrust act the clayton antitrust act is an amendment passed by u. It encompasses mergers as well as acquisitions of some or all of the stock or assets of one entity by another. Section 5 is generally viewed as covering not only the same civil antitrust violations prosecuted by the ftc and doj under the sherman act4 and the clayton act,5 but also other conduct that may not be reached by the sherman and clayton acts, such as invita. Congress in 1914 that provides further clarification and substance to the sherman antitrust act of 1890 on topics such as price discrimination, price fixing and unfair business practices.
The sherman antitrust act is a federal law prohibiting any contract, trust, or conspiracy in restraint of interstate or foreign trade. Whereas the sherman act only declared monopoly illegal, the clayton act defined as illegal certain business practices that are conductive to the formation of monopolies or that result from them. Definition of clayton antitrust act law dictionary. Merging innovation into antitrust agency enforcement of the clayton. Clayton act of 1914 clayton act of 1914\federal trade. The clayton antitrust act 1914 the clayton antitrust act is comprised of 12, 1419, 20, 21, 2227 of title 15. Conduct involving trade or commerce with foreign nations. A concise history of corporate mergers and the antitrust laws in the united states. Trade commission act of 1914,3 which prohibits unfair methods of competition. One way in which the federal trade commission 1914 and the clayton antitrust act 1914 are similar is that both 2 attempted to correct abusive business practices, since they both aimed at curbing the monopolies that were dragging the us economy down. The clayton antitrust act of 1914 enacted october 15, 1914, was a part of united states antitrust law with the goal of adding further substance to the u. Clayton act 7a hartscottrodino antitrust improvements act of. The clayton antitrust act of 1914 made good some of the deficiencies of the sherman antitrust act of 1890.
Us antitrust law and policy in historical perspective harvard. Clayton antitrust act, law enacted in 1914 by the united states congress to clarify and strengthen the sherman antitrust act 1890. Congress passed the first antitrust law, the sherman act, in 1890 as a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade. Florence kelley the head of the national consumers league who spearheaded the progressive crusade to regulate the hours of work for women. One way in which the federal trade commission 1914 and the. A brief overview of american antitrust law pdf 249kb oxford law. Clayton antitrust act apush questions focus on the reasons for and impact of this key legislation. The clayton antitrust act built heavily on this earlier law to provide. The clayton act and federal trade commission acts of 1914 are. A 1950 refinement of previous antitrust legislation dealing primarily with mergers. The clayton antitrust act of 1914 was an addition to the sherman antitrust act of 1890 that protected consumers against harmful, anticompetitive business arrangements such as monopolies and cartels by defining prohibitions and an enforcement scheme.
Be it enacted by the senate and house of representatives of the united states of america in congress assembled, that antitrust laws, as used herein, includes the act entitled an act to protect trade and commerce against unlawful restraints and monopolies, approved july second, eighteen. A federal law enacted in 1914 as an amendment to the sherman antitrust act 15 u. One way in which the federal trade commission 1914 and. Why did the government pass the clayton antitrust act of 1914. The clayton act regulates general practices that potentially may be detrimental to fair competition. An act to supplement existing laws against unlawful restraints and monopolies, and for other purposes. Clayton antitrust act legal definition merriamwebster. The expansion of the sherman act, created in 1914, this is the federal antitrust act which prohibits anti trust activities, the interference with interstate commerce and trade whether done directly or indirectly.
The clayton antitrust act, passed in 1914, continues to regulate u. The main statutes are the sherman act of 1890, the clayton act of 1914 and the federal trade commission act of 1914. Clayton antitrust act the clayton antitrust act of 1914, sought to strengthen the sherman antitrust act of 1890. Established the federal trade commission in 1914 to enforce existing antitrust laws that prohibited business combinations in restraint of trade. Clayton antitrust act, law enacted in 1914 by the united states congress to clarify and strengthen the sherman antitrust act. One of the important new freedom progressive reforms, attacks against unfair business practices and federal laws passed during his presidency was the clayton antitrust act. Congress in 1914 passed the clayton act as well as the federal trade commission act, which included section 7, an antimerger provision that was intended to reach. The clayton act specified particular prohibited conduct, the threelevel enforcement scheme. The clayton antitrust act of 1914 was a part of united states antitrust law with the goal of.
Pdf the evolution ofantitrust law in usa researchgate. The sherman antitrust act was rather vaguely worded that enabled a businessman to engage in restrictive trade practices adversely affecting competition but without offending any provision of the said statute. Section 7 of the clayton antitrust act of 1914 clayton act. History project by emily carpentier, constantine banez and rachel miyagawa. Section 7 of the clayton antitrust act of 1914 clayton act, as amended, applies to any acquisition of stock or assets within interstate commerce within the united states. Clayton act of 1914 clayton act of 1914\federal trade act. The clayton antitrust act of 1914 clayton antitrust act pt 4 organized labor was as heartened by the act as it had been dejected by the doctrine of the danbury hatters case, but subsequent judicial construction weakened the acts labor provisions. The clayton antitrust act was part of the early 20thcentury efforts to curb the power of big businesses. The expansion of the sherman act, created in 1914, this is the federal antitrust act which prohibits antitrust activities, the interference with interstate commerce and trade whether done directly or indirectly. Clayton antitrust act article about clayton antitrust act. What is the sherman antitrust act and the clayton act. In the united states, antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote competition for the benefit of consumers. Congress in 1914 that provides further clarification and substance to the sherman antitrust act of 1890. The union was now a key player in the political realm and a powerful force in the labor movement.
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