In the modern marketplace, competition is held in high regard. Competition is supposed to breed innovation, improve products, and provide consumers with choices that can better fit their needs. But competition can be a tricky thing, and businesses don’t mind playing dirty. Antitrust laws have been put into place for over a century to protect consumers and prevent businesses from having too much market control. These laws are more important today than ever before, and to move forward with confidence in the field, you should have a good foundation of understanding to work with. Here are the key takeaways on what you need to know about antitrust laws.

Sherman Antitrust Act of 1890

Antitrust laws were established with the Sherman Antitrust Act of 1890. Around that time, many companies began acting as trusts – in exchange for trust certificates, stockholders traded their stock away to a board of trustees. The trustees chose the directors of the corporation’s component companies. These companies were essentially monopolies under multiple component companies being in the hands of a few trustees. 

The Sherman Antitrust Act of 1890 did many things, but the most important was allowing the government to dissolve trusts. Any company combination  “in the form of trust or otherwise that was in restraint of trade or commerce among the several states, or with foreign nations” was illegal thereafter.

The FTC and Clayton Antitrust Act

Next came the Federal Trade Commission and Clayton Antitrust Acts. These were put into place close together, and have formed the foundation of modern antitrust proceedings. The FTC is well known as a commission that has been empowered to prevent unfair and deceptive practices in the marketplace. Since establishment, it has allowed consumers to pursue redress against large corporations and has established the ground rules in dealing with anti-competitive acts.

The Clayton Antitrust Act came soon afterward. This Act was put into place to prevent what was described as “industrial slavery” at the hands of anti-competitive mergers and predatory businesses that were rapidly forming monopolies in the country. The act established and defined many of the most unethical, unfair, and anticompetitive acts that the FTC would pursue action against, including

  • Price discrimination, cutting, and fixing
  • Unethical labor practices
  • Anticompetitive mergers and acquisitions
  • Exclusive dealings and similar sales practices
  • Directing multiple companies when merging would break antitrust criteria


Antitrust laws are not just put in place to protect the consumer and laborer – occasionally they have been enacted against unions, in fact. But these laws and regulations provide the marketplace with guidelines that prevent a single entity from taking over every corner of the market. In the American marketplace, the almighty dollar drives all businesses, regardless of reason or sanity. Having these laws in place boosts competitive innovation and development – which is better for everyone in the end.