Interpretation of section one of the Sherman Act: evolution of approaches

Abstract

Nowadays, the problem of illegal collaboration activities is a significant issue facing not only the United States of America, but the whole world. It is important to save free market economy to allow businesses to thrive and provide consumers with a variety of choices. In a competitive market the consumer is always plays the most important role and has a great support. Nonetheless, sometimes competing companies get together and decide to control markets. Trading giants have powerful mechanisms of manipulation which affect market prices, limit competition in private industry and produce worse outcomes for consumers and society. One of the most common ways to do it is to form a cartel – a collaboration among competitors which is aim to restrict competition, fix prices and coordinate behaviour on the market. If you look at the history of anti-cartel enforcement over last five or six decades, there is hardly a sector of an economy where cartels have not been discovered. Section one of the Sherman Antitrust Act prohibits illegal agreements between or among competitors in restraint of trade. The interpretation of this section has been developed since 1890, when the Sherman Act was passed by Congress. This paper examines different approaches towards interpretation of collaborations among competitors and related problems of current antitrust policy. Under this broad question, this paper will identify different features of illegal agreements and three types of analysis – Per Se, rule of reason and a quick look. Furthermore it discusses abusive conduct which includes such categories as price exploitation, limiting production, tying and predatory pricing. Ultimately this paper will conclude that interpretation of the first section of Sherman act has been developed dramatically through the history of American antitrust case law, but the concepts has been blurred by the courts and need further governmental development.