The Sherman Antitrust Act

The Sherman Antitrust Act (15 U.S.C. §§ 1) was adopted in 1890 and is the primary federal antitrust law in the United States. The Act prohibits all contracts, combinations, and conspiracies that unreasonably restrain interstate trade (Section 1 violations), as well as efforts to monopolize any part of interstate commerce (Section 2 violations).

It is one of three core federal antitrust laws, along with the Clayton Antitrust Act and the Federal Trade Commission Act.

Antitrust Violations under the Sherman Act

The Sherman Act does not prohibit every restraint of trade, only those that are unreasonable. Activities such as the formation of a partnership may restrain trade, but do not do so unreasonably. There are two broad types of Sherman Act violations:

    • Violations “per se”

Actions that almost always restrain trade and require little investigation into its impact on competition are called “per se” violations. When prosecuting a per se violation, the action’s intention does not need to be proven, only the fact that the action took place. Examples of this type of violation are price fixing, market division schemes, bid rigging, and group boycotting.

    • Violations of the “rule of reason”

Some business practices must be examined in context, and violate the “rule of reason” if it is found to unreasonably restrain trade. Examples of these types of violations are monopolies, tying, exclusive dealings, and price discrimination.

Enforcement of the Sherman Act

The Sherman Act allows private parties who were harmed by companies violating the Act to pursue litigation for treble damages, plus court costs and attorneys’ fees.

Federal agencies such as the U.S. Department of Justice Antitrust Division and the Federal Trade Commission also enforce the Sherman Act.

Report a Sherman Act Antitrust Violation

Speak with an antitrust attorney. All communications with our law firm are confidential and protected by the attorney-client privilege.

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