What is the Sherman Act?
The Sherman Antitrust Act of 1890 (15 U.S.C. § 1-7) has been one of the most enduring pieces of legislation in the nation’s history. Passed in an effort to protect consumers from collusive anti-competitive behavior by market participants, the statutes are still applied over a century later to prohibit agreements that unreasonably restrain market competition. The Sherman Act mainly focused on collusion among two or more businesses to effect a favorable market position by eliminating some or all competition. The statutes outlaw such activity as price fixing, bid rigging, and market allocation schemes, and criminalize most forms of monopolization as well. Navigating the Sherman Act is key to understanding sorts of business conduct are prohibited, as well as how a charge of antitrust violation can be defended against.
The first two sections of the Act contain the substantive provisions of the legislation. The first section prohibits specific means of anti competitive conduct, while the second section outlaws end results that are by nature anti competitive The third section of the Act extends the first two provisions to reach US territories and the District of Columbia along with the 50 states. The fourth section conveys federal jurisdiction and investigative authority to the federal district courts and the Attorney General’s office, respectively. In the fifth section, Congress expressly provides that additional parties can be brought into antitrust prosecutions if sufficiently involved in the collusive activity. The sixth section of the Act provides for criminal forfeiture of property owned under collusive or conspiratorial contracts or agreements. Finally, the last section defines “person” to include corporations and associations, which means that corporations can be charged and prosecuted criminally under the Sherman Act.