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Sherman Antitrust Act of 1890

Today in the United States monopolistic power
means that a business has the ability to raise prices above
competitive levels. This typically occurs when an organi-
zation has exclusive control over a commercial activity,
such as the production or selling of a commodity or serv-
ice, and thus has the power to fix prices unilaterally
because it has no effective competition. Significant
antitrust litigation has included the following:

EARLY TWENTIETH CENTURY
• American Tobacco: broken up into separate compa-
nies
• Standard Oil: broken up into separate oil-refining
and pipeline companies
• U.S. Steel: no illegal monopoly found

FROM THE LATE TWENTIETH
CENTURY ON
• IBM: accused of being an illegal monopoly; case
dropped
• AT&T: accused of being an illegal monopoly; bro-
ken up into one long-distance and seven “Baby Bell”
local phone companies
John Pierpont Morgan Sr. (1837–1913). Steel mogul
Morgan was directly affected by the Sherman Antitrust Act. • Microsoft: accused of using monopoly power to sell
GETTY IMAGES other products
• Intel: accused of severing business ties with cus-
tomers who sued it; penalties varied depending on
monopolies, such as corporate mergers and acquisitions, customers bringing litigation
price discrimination, tying agreements, and interlocking
• Weyerhaeuser: federal jury ruled Weyerhaeuser used
directorships. Other antitrust acts followed, including the
illegal tactics to force a competing sawmill out of
Federal Trade Commission Act of 1914, the Robinson-
Patman Act of 1936, and the Celler-Kefauver Antimerger business
Act of 1950.
SEE ALSO Antitrust Legislation
Consequences of being found guilty of antitrust
activity and being a monopoly are a fine not exceeding
$10 million if a corporation, or $350,000 if person, or by BIBLIOGRAPHY
Dickson, Peter R., and Wells, Philippa K. (2001, Spring). The
imprisonment not exceeding three years, or by both pun-
dubious origins of the Sherman Antitrust Act: The mouse
ishments, at the discretion of the court. Furthermore, the
that roared. Journal of Public Policy and Marketing, 20(1), 3.
court can require breakup of the company and other con-
FTC approves Intel deal. (2000, March 6). The Washington Post.
sequences based on individual cases. From http://www.washingtonpost.com/wp-srv/business/
According to Peter Dickson and Philippa Wells it is longterm/intel/intel.htm, retrieved January 5, 2006.
one of the great ironies in U.S. jurisprudence and free- Garman, E. Thomas (2005). Consumer economics issues in Amer-
market capitalism that the Sherman Act became the foun- ica (8th ed.). Mason, OH: Thomson Custom Solutions.
dation of modern economic regulation, the legislative Rivera, D. (2003, April 19). Weyerhaeuser loses lawsuit; jury
promoter and protector of the competitive efficiency of says timber giant illegally eliminated rival. The Oregonian
the modern competitive political economy. They posit (Portland, OR). Retrieved from
http://www.oregonlive.com/search/oregonian/ January 5,
that the Sherman Antitrust Act has survived in the age of
2006.
global tariff protection, and now that tariffs are coming
down, its reach is becoming even greater, extending into
global markets. Phyllis Bunn

666 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION