The Clayton Antitrust Act mandates that companies that want to merge must notify and receive permission from the government through the Federal Trade Commission FTC to do so. The Clayton Act is still in force today, essentially in its original form. The Robinson-Patman Act reinforces laws against price discrimination among customers.
The Celler-Kefauver Act prohibits one company from acquiring the stock or assets of another firm if an acquisition reduces competition. It further extends antitrust laws to cover all types of mergers across industries, not just horizontal ones within the same sector. This amendment requires that companies planning big mergers or acquisitions make their intentions known to the government before taking any such action.
The Sherman Antitrust Act of was proposed by Sen. The Sherman Act prohibited trusts and outlawed monopolistic business practices, making them illegal in an effort to bolster competition within the marketplace. The act contained three sections. The first section defined and banned different types of anticompetitive conduct, the second section addressed the end results considered to be anticompetitive, and the third and final section extended the provisions in the first section to include the District of Columbia and any U.
But the language used in the Sherman Act was deemed too vague. This allowed businesses to continue engaging in operations that discouraged competition and fair pricing.
These controlling practices directly impacted local concerns and often drove smaller entities out of business, which necessitated the passing of the Clayton Antitrust Act in For example, while the Sherman Act made monopolies illegal, the Clayton Act bans operations intended to lead to the formation of monopolies. There are three main antitrust laws in the United States.
The Clayton Act, in conjunction with other antitrust laws, is responsible for making sure that companies behave themselves and that there is fair competition in the marketplace, which, according to economic theory, should lead to lower prices, better quality, greater innovation, and wider choice.
Most people agree that these types of antitrust laws benefit society. If companies were given free rein to make profits by any means necessary, it would likely prove detrimental to everyone other than the company that came out on top. There are, however, many people who oppose antitrust laws like the Clayton Act. In their view, allowing businesses to compete without restraints and to fully capitalize on their market power would ultimately prove favorable to consumers and the economy. Federal Trade Commission.
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The FTC Act also reaches other practices that harm competition, but that may not fit neatly into categories of conduct formally prohibited by the Sherman Act. The Clayton Act addresses specific practices that the Sherman Act does not clearly prohibit, such as mergers and interlocking directorates that is, the same person making business decisions for competing companies.
Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly. The Clayton Act was amended again in by the Hart-Scott-Rodino Antitrust Improvements Act to require companies planning large mergers or acquisitions to notify the government of their plans in advance.
The Clayton Act also authorizes private parties to sue for triple damages when they have been harmed by conduct that violates either the Sherman or Clayton Act and to obtain a court order prohibiting the anticompetitive practice in the future.
In addition to these federal statutes, most states have antitrust laws that are enforced by state attorneys general or private plaintiffs. Many of these statutes are based on the federal antitrust laws.
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