The Sherman Act of 1890 was the initial measure to prevent the occurrence of monopolistic practices. Named after Senator John Sherman from Ohio, the act's principal argument is to preserve free and unrestricted competition by regulating interstate commerce. The Senate passed the act on April 8, 1890 with a vote of 51-1.
The act was deemed as a critical success after its first case of U.S. vs. E.C. Knight Company of 1895. The Sherman Act was then used from the turn of the century on as an effort to ensure a competitive free market. A detailed list of cases may be found on the Chronological Index of Antitrust Cases .
There are seven main sections of the Sherman Antitrust Act.
1. Trusts in restraint of trade illegal
2. Monopolizing trade a felony
3. Trusts in Territories or District of Columbia illegal
4. Jurisdiction of courts; duty of United States
5. Bringing in additional parties
6. Forfeiture of property in transit
7. “Person” or “persons” defined
In some of the cases, which we later discuss, we refer to violations of specific sections of the Sherman Act. Agreements between competitors, contracts and arrangements between buyers and sellers, and monopolistic pursuit are all types of restraint, which the act condemns.
The Congress of the United States passed the Sherman Act of 1890 in order to prevent the creation of monopolies and to increase competition. This helps our economy by creating lower prices, higher quality goods, and promotes innovation.
Key Ideas of Sherman Act
• First antitrust law
• Bans unfair methods of competition
• Bans unfair or deceptive acts or practices
• Severe Penalties
• Standard Oil Co. of New Jersey v. United States (Trusts)
• United States v. American Telephone & Telegraph Co. (Monopoly)
• California v. American Stores Co. (Merge)