Sherman Antitrust Act

On July 2, 1890, President Benjamin Harrison signed the Sherman Antitrust Act, named for Senator John Sherman of Ohio. Its first two sections are short: Section 1 bans contracts, combinations and conspiracies in restraint of trade, and Section 2 bans monopolizing, or attempting to monopolize, trade. It was the first federal law to limit business combinations, and it passed Congress by near-unanimous votes.¹

The act answered the age of the trust. After the Civil War, railroads and the transcontinental line created national markets, and cheap oil and steel created giant firms. John D. Rockefeller's Standard Oil, which began the 1882 trust that gave its name to the movement, controlled most US refining. Farmers and small merchants complained of price fixing and rate discrimination, and both parties wanted to be seen acting. The law's text was vague, and its first decade was weak: in 1895 the Supreme Court ruled that a sugar trust was manufacturing, not commerce, and so beyond the Act, and early uses went against labor unions, as in the 1894 Pullman strike.¹

Enforcement began in earnest under Theodore Roosevelt, whose administration broke up the Northern Securities railroad combination in 1904. In 1911 the Supreme Court ordered Standard Oil split into 34 companies. Congress added the Clayton Act and the Federal Trade Commission in 1914. Later cases against AT&T in 1982, Microsoft around 2000, and Google and others in the 2020s continue the tradition. Other countries, from Canada to the European Union, built their own competition law on similar ideas.¹