The Origins and Impact of Antitrust Law

A Brief History

Antitrust law in the United States traces its roots back to the 1800s, a time when large
businesses held monopolistic control over entire industries. Giants like
U.S. Steel and Standard Oil dominated their sectors, controlling both supply and price. This
unchecked power made it nearly impossible for small competitors to enter the market, and
consumers were left with few choices and inflated prices.

To combat these abuses, Congress passed the Sherman Act in 1890, making it illegal to engage
in activities that restrained trade or demonstrated monopolistic behavior. This landmark
legislation laid the foundation for future antitrust enforcement.

In 1914, The Clayton Act was passed, and its goal was to promote fair competition and enhance
protection for consumers by prohibiting certain mergers and acquisitions that could stifle
competition

Together, these laws form the backbone of U.S. antitrust policy, designed to maintain a healthy,
competitive marketplace that encourages innovation and consumer choice.

What Practices Do Antitrust Laws Prohibit?
Antitrust laws are designed to prevent business practices that stifle competition or
unfairly exclude rivals. Here are some of the most common violations:

1. Price Fixing.
Price fixing occurs when competitors agree to set prices at a certain level, eliminating price
competition. This includes setting a fixed price, establishing price ranges, or agreeing on
minimum pricing.

2. Tying and Bundling.
This practice involves conditioning the sale of one product on the purchase of another. For
example, a company might require customers to buy a less desirable product in order to access a
more popular one. This tactic limits consumer choice and can unfairly disadvantage competitors..

3. Predatory Pricing.
Predatory pricing happens when a company sets prices for a good or service so low that
competitors are not able to compete and forces them out. Once the competitors are eliminated,
the company raises its prices again, harming consumers in the long run.

4. Exclusionary conduct.
A company may use its market power to prevent other businesses from working with
competitors. For instance, it might offer contracts that prohibit partners from doing business with
rival companies.

5. Monopolization.
Being a monopoly isn’t inherently illegal. However, using monopoly power to engage in
anticompetitive practices—such as blocking competitors or manipulating markets—can
constitute illegal monopolization or attempted monopolization..

If you have any questions or want assistance with information relating to Antitrust and
Competition Law, please reach out to one of our attorneys at McNeelyLaw LLP by calling
(317)825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of
any specific facts or circumstances. The contents are intended for general informational
purposes only, and you are urged to consult your own lawyer on any specific legal questions you
may have concerning your situation.