List the major antitrust acts of the United States. Explain why each act was created, whether it
was effective or ineffective, and what each act did regarding fighting monopolies and creating
fair competition. (4 points)
1. Sherman Antitrust Act of 1890
- Created: The Sherman Antitrust Act was created in response to increasing concern over the growing power of trusts and monopolies in the late 19th century. It was the first federal act to outlaw monopolistic business practices and to promote fair competition in the marketplace.
- Effectiveness: The Sherman Antitrust Act has been effective in breaking up several large corporations and monopolies, such as Standard Oil and American Tobacco Company. However, its enforcement has been inconsistent, and some argue that it has not been fully effective in preventing the formation of monopolies.
- Impact: The Sherman Antitrust Act prohibited certain business practices that restrict competition, such as price fixing, bid rigging, and market allocation agreements. It aimed to promote fair competition and prevent the formation of monopolies that could harm consumers.
2. Clayton Antitrust Act of 1914
- Created: The Clayton Antitrust Act was passed to strengthen and clarify the Sherman Antitrust Act. It aimed to address loopholes in the Sherman Act and to further regulate anticompetitive business practices.
- Effectiveness: The Clayton Antitrust Act was effective in curbing some anticompetitive practices, such as exclusive dealing and tying arrangements. However, its effectiveness in preventing the formation of monopolies has been debated.
- Impact: The Clayton Antitrust Act prohibited certain anticompetitive practices, such as price discrimination, mergers and acquisitions that could lessen competition, and interlocking directorates. It also exempted labor unions from antitrust laws, recognizing the importance of collective bargaining for workers.
3. Federal Trade Commission Act of 1914
- Created: The Federal Trade Commission Act created the Federal Trade Commission (FTC) to enforce antitrust laws and to promote fair competition in the marketplace. It aimed to prevent unfair methods of competition and deceptive business practices.
- Effectiveness: The Federal Trade Commission Act has been effective in investigating and prosecuting anticompetitive behavior and promoting fair competition. The FTC has played a key role in enforcing antitrust laws and protecting consumers.
- Impact: The Federal Trade Commission Act empowered the FTC to investigate and prosecute unfair methods of competition, such as false advertising, price discrimination, and deceptive business practices. It also created a framework for regulating competition and protecting consumers from anticompetitive practices.
Overall, these major antitrust acts were created to promote fair competition, prevent monopolies from harming consumers, and regulate anticompetitive business practices. While each act has had varying degrees of effectiveness, they have played a crucial role in shaping competition policy in the United States and protecting consumers from anticompetitive behavior.