Sherman Act

Definition: The Sherman Act is the 1890 U.S. antitrust law. It has been described as vague, leading to ambiguous interpretations over the years.

Section one of the law forbids certain joint actions: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared illegal...."

Section two of the law forbids certain individual actions: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony..."

The reasons for the passage of the Sherman Act:

1. To promote competition to benefit consumers
2. Concern for injured competitors
3. Distrust of concentration of power

(Econterms)

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