Posted in Finance, Accounting and Economics Terms, Total Reads: 166
Definition: Sherman Antitrust Act
Sherman Antitrust Act is a landmark act in the United States; this law was mandated to increase the economic competitiveness. This law made it illegal for any company to work in a situation or service in which it may have a monopolistic advantage.
This monopolistic advantage could be on a product or a service and also to not form a cartel. Though the name suggest “Anti” Trust, it is not actually pertaining only to trusts but to all the firms and all companies.
There were much causality as and when the law was enacted, few of the companies who had to shut shop due to this law are Northern Securities Company, American Railway Corporation and American Tobacco Company. It is an important law in the trade and it attempts to ensure that there is no artificial rising of prices by restriction of trade and/or supply. The law is not to protect businesses ie protecting the businesses from working of a market. IT is for protecting the people and/or society from the failure of the market. The law is basically against any activity that is anti-competitive