Federal Laws

The three laws described in the following paragraphs are the basic antitrust laws of the United States. These laws, especially the Clayton Act, have been amended many times. Sections of laws dealing with foreign trade have also dealt with problems of monopoly and unfair practices.

(1890) declares contracts and business alliances, or combinations, that restrain interstate trade and commerce to be illegal. The attempt to monopolize or conspire to monopolize any part of interstate or international trade is made punishable as a misdemeanor. (Exporters were exempted from antitrust laws in 1918 in order to help them compete on more equal terms with foreign companies. In 1974 some violations of antitrust laws, such as price fixing [an agreement among competing producers to avoid competitive pricing by charging identical prices], were changed from misdemeanors to felonies.)

This general anti-monopoly law is enforced by the Antitrust Division of the U.S. Department of Justice. One of this agency's tasks is to give opinions on the acceptability under the Sherman Act of mergers between firms, prior to their taking place.

(1914) declares certain acts unlawful "where the effect is substantially to lessen competition, or where they tend to foster a monopoly." Such acts include price discrimination (the charging of different prices to different buyers for the same products purchased in the same quantities); leases or sales in which the lessee or buyer must agree not to use the products of a competitor of the lessor or seller; and, in certain cases, the acquisition of stock of another company.

Most of this act's provisions are enforced by the Federal Trade Commission. Those applicable to communications are enforced by the Federal Communications Commission, and those applicable to banking, by the Federal Reserve Board.

(1914) established the Federal Trade Commission to enforce the unfair practices sections of the Clayton Act.