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The Sherman Antitrust Act
In the late 1800s, businesses began to gain market dominance by forming anti-competitive agreements. These relationships were called trusts.
Trusts cut prices drastically in order to drive competitors out of business. Among their other anti-competitive techniques were:
Buying out competitors
Forcing customers to sign long-term contracts
Forcing customers to buy unwanted products in order to receive other goods
In 1890, Congress responded by passing the Sherman Antitrust Act, which outlawed trusts and prohibited "illegal" monopolies, or monopolies that could be shown to be using their power to squelch competition. In the early 1900s, Congress used the act to break up two such monopolies — the Standard Oil Co. and the American Tobacco Co.
© Copyright 1998 The Washington Post Company
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