What is the Sherman Antitrust Act?
The Sherman Antitrust Act is a federal law that was enacted in 1890 by the United States Congress and is the first law to regulate business practices that are considered to be unfair and anti-competitive. The law was introduced in order to protect consumers from monopolies and prevent businesses from gaining too much power in the market. The Act prohibits any form of restraint of trade, including price-fixing, bid-rigging, and market allocation. It also prohibits companies from forming businesses for the sole purpose of monopolizing a market. Under the Sherman Antitrust Act, businesses found to be engaging in these activities can be held liable and can face serious legal penalties including fines, jail time, and even the breakup of the offending company. The Sherman Antitrust Act is one of the foundations of Unfair Competition Law in California and other states which allows private citizens and organizations to challenge companies that are engaging in unfair or anti-competitive practices. A successful challenge results in a court order prohibiting the offending companies from engaging in the unlawful practice and can also result in the awarding of damages to the victim of the unfair competition. These laws are enforced by the Federal Trade Commission, the U.S. Department of Justice, and state-level agencies.
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