Changes

England enacted a statutory prohibition on monopolies in 1624<ref> "An Act Concerning Monopolies and Dispensations of Penal Laws and the Forfeitures Thereof" "Statute of Monopolies", 1624, 21 Jam., ch. 3 (Eng.)</ref> American states enacted individual prohibitions against monopolies as early as 1641, with the Massachusetts Bay Colony stating that "there shall be no monopolies granted or allowed among us but of such new inventions as are profitable to the country, and that for a short time".<ref>Victor Selden Clark, ''History of Manufactures in the United States ...: 1607-1860'' (1916) [http://books.google.com/books?id=x-EMAAAAIAAJ&pg=PA47&dq=%22allowed+among+us+but+of+such+new+inventions+as+are+profitable+to+%22&lr=&as_drrb_is=q&as_minm_is=0&as_miny_is=&as_maxm_is=0&as_maxy_is=&num=30&as_brr=0#v=onepage&q=%22allowed%20among%20us%20but%20of%20such%20new%20inventions%20as%20are%20profitable%20to%20%22&f=false vol 1 p 47 online] </ref>

England enacted a statutory prohibition on monopolies in 1624<ref> "An Act Concerning Monopolies and Dispensations of Penal Laws and the Forfeitures Thereof" "Statute of Monopolies", 1624, 21 Jam., ch. 3 (Eng.)</ref> American states enacted individual prohibitions against monopolies as early as 1641, with the Massachusetts Bay Colony stating that "there shall be no monopolies granted or allowed among us but of such new inventions as are profitable to the country, and that for a short time".<ref>Victor Selden Clark, ''History of Manufactures in the United States ...: 1607-1860'' (1916) [http://books.google.com/books?id=x-EMAAAAIAAJ&pg=PA47&dq=%22allowed+among+us+but+of+such+new+inventions+as+are+profitable+to+%22&lr=&as_drrb_is=q&as_minm_is=0&as_miny_is=&as_maxm_is=0&as_maxy_is=&num=30&as_brr=0#v=onepage&q=%22allowed%20among%20us%20but%20of%20such%20new%20inventions%20as%20are%20profitable%20to%20%22&f=false vol 1 p 47 online] </ref>

==Antitrust Policy in the United States==

==Antitrust Policy in the United States==

The main purpose of antitrust laws is to reinforce and protect the core [[Republicanism, U.S.|republican values]] regarding free enterprise in America.  Although "trust" had a technical legal meaning, the word was commonly used to denote big business, especially a large, growing manufacturing or retailing company of the sort that suddenly emerged in great numbers in the 1880s and 1890s. (Separate laws and policies emerged regarding railroads and financial concerns such as banks and insurance companies.)  Republicanism required free competition, and the opportunity for Americans to pursue their own business without being crushed by an economic collossus.  As Senator John Sherman put it, "If we will not endure a king as a political power we should not endure a

The main purpose of antitrust laws is to reinforce and protect the core [[Republicanism, U.S.|republican values]] regarding free enterprise in America.  Although "trust" had a technical legal meaning, the word was commonly used to denote big business, especially a large, growing manufacturing or retailing company of the sort that suddenly emerged in great numbers in the 1880s and 1890s. (Separate laws and policies emerged regarding railroads and financial concerns such as banks and insurance companies.)  Republicanism required free competition, and the opportunity for Americans to pursue their own business without being crushed by an economic colossus.  As Senator John Sherman put it, "If we will not endure a king as a political power we should not endure a

king over the production, transportation, and sale of any of the necessaries of life." The Sherman Antitrust Act passed Congress almost unanimously in 1890. and remains the core of antitrust policy. The Act makes it illegal to try to restrain trade, or to form a monopoly.  It gives the Justice Department the mandate to go to federal court for orders to stop the illegal behavior or to impose remedies.  Presidents [[Theodore Roosevelt]] and [[William Howard Taft]] sued scores of companies under the Sherman Act.  In the first major episode, the government stopped the formation of the "Northern Securities Company," which threatened to monopolize transportaion in the northwest. The most notorious of the trusts was the [[Standard Oil Company]]; [[John D. Rockefeller]] in the 1870s and 1880s had used economic threats against competitors and

king over the production, transportation, and sale of any of the necessaries of life." The Sherman Antitrust Act passed Congress almost unanimously in 1890. and remains the core of antitrust policy. The Act makes it illegal to try to restrain trade, or to form a monopoly.  It gives the Justice Department the mandate to go to federal court for orders to stop the illegal behavior or to impose remedies.  Presidents [[Theodore Roosevelt]] and [[William Howard Taft]] sued scores of companies under the Sherman Act.  In the first major episode, the government stopped the formation of the "Northern Securities Company," which threatened to monopolize transportaion in the northwest. The most notorious of the trusts was the [[Standard Oil Company]]; [[John D. Rockefeller]] in the 1870s and 1880s had used economic threats against competitors and

secret rebate deals with railroads to build a monopoly in the oil business. A federal criminal lawsuit alleged the illegal rebates continued after 1900. In 1911 the Supreme Court upheld the court decision against Standard Oil and broke the monopoly into three dozen separate companies that eventually competed with one another, including Standard Oil of New Jersey (later known as Exxon and Exxon-Mobil), Standard Oil of Indiana (Amoco), of New York (Mobil), of California (Chevron), and so on.  

secret rebate deals with railroads to build a monopoly in the oil business. A federal criminal lawsuit alleged the illegal rebates continued after 1900. In 1911 the Supreme Court upheld the court decision against Standard Oil and broke the monopoly into three dozen separate companies that eventually competed with one another, including Standard Oil of New Jersey (later known as Exxon and Exxon-Mobil), Standard Oil of Indiana (Amoco), of New York (Mobil), of California (Chevron), and so on.  

In approving the breakup of Standard Oil the Supreme Court added the "[[Rule of reason]]": not all big companies, and not all monopolies, are evil. They had to somehow damage the economic environment of their competitors.  Roosevelt for his part distinguished between "good trusts"--which built the world's greatest economy--and bad ones which preyed on smaller fry.  Thus U.S. Steel Corporation, which was much larger than Standard Oil, won its antitrust suit in 1920 because it proved in court that it was well behaved.  Labor unions, whose use of boycotts and strikes was banned by courts as a restraint of trade, hated the original Sherman Act; they were given relief in the Clayton Act of 1914.   

In approving the breakup of Standard Oil the Supreme Court added the "[[Rule of reason]]": not all big companies, and not all monopolies, are evil. They had to somehow damage the economic environment of their competitors.  Roosevelt for his part distinguished between "good trusts"--which built the world's greatest economy--and bad ones which preyed on smaller fry.  Thus U.S. Steel Corporation, which was much larger than Standard Oil, won its antitrust suit in 1920 because it proved in court that it was well behaved.  Labor unions, whose use of boycotts and strikes was banned by courts as a restraint of trade, hated the original Sherman Act; they were given relief in the Clayton Act of 1914.   

The biggest problem under Sherman was that businessmen did not know what was allowed and what was not. Therefore in 1914 Congress set up the Federal Trade Commission (FTC), which defined anti-competitive behavior, and provided an alternative mechanism to police anti-trust.  

The biggest problem under Sherman was that businessmen did not know what was allowed and what was not. Therefore, in 1914 Congress set up the Federal Trade Commission (FTC), which defined anti-competitive behavior, and provided an alternative mechanism to police anti-trust.  

America adjusted to bigness after 1910. [[Henry Ford]] dominated auto manufacturing, but he built millions of cheap cars that put America on wheels, and at the same time lowered prices, raised wages, and promoted efficiency.  Ford became as much of a popular hero as Rockefeller had been a villain; talk of trust busting  aded away.  In the 1920s and 1930s the threat to the free enterprise system seemed to come from unrestricted cutthroat competition, which drove down prices and profits and made for inefficiency.  Under the leadership of [[Herbert Hoover]], the government in the 1920s promoted business cooperation, fostered the creation of self-policing trade associations, and made the FTC an ally of respectable business.  The New Deal likewise tried

America adjusted to bigness after 1910. [[Henry Ford]] dominated auto manufacturing, but he built millions of cheap cars that put America on wheels, and at the same time lowered prices, raised wages, and promoted efficiency.  Ford became as much of a popular hero as Rockefeller had been a villain; talk of trust busting  aded away.  In the 1920s and 1930s the threat to the free enterprise system seemed to come from unrestricted cutthroat competition, which drove down prices and profits and made for inefficiency.  Under the leadership of [[Herbert Hoover]], the government in the 1920s promoted business cooperation, fostered the creation of self-policing trade associations, and made the FTC an ally of respectable business.  The New Deal likewise tried

to stop cutthroat competition.  The [[NRA]] (1933-35) was a short-lived program in 1933-35 designed to strengthen trade associations, and raise prices, profits and wages at the same time. The Robinson-Patman Act of 1936 sought to protect local retailers against the onslaught of the more efficient chain stores, by making it illegal to discount prices.  To control big business the New Deal preferred federal and state regulation-- controlling the rates and telephone services provided by ATT for example--and by building up countervailing power in the form of labor unions.

to stop cutthroat competition.  The [[NRA]] (1933-35) was a short-lived program in 1933-35 designed to strengthen trade associations, and raise prices, profits and wages at the same time. The Robinson-Patman Act of 1936 sought to protect local retailers against the onslaught of the more efficient chain stores, by making it illegal to discount prices.  To control big business the New Deal preferred federal and state regulation-- controlling the rates and telephone services provided by ATT for example--and by building up countervailing power in the form of labor unions.

By the 1970s fears of "cutthroat" competition had been displaced by confidence that a fully competitive marketplace produced fair returns to everyone.  As unions faded in strength, the government paid much more attention to the damages that unfair competition could cause to consumers, especially in terms of higher prices, poorer service, and restricted choice.  In 1983 the Reagan adminstration used the Sherman Act to break up [[ATT]], a nationwide telephone monopoly, into one long-distance company and six regional local service companies, arguing that competition should replace monopoly for the benefit of consumers and the economy as a whole. In 1999 a coalition of 19 states and the federal Justice Department sued Microsoft. A highly publicized trial demonstrated that [[Bill Gates]]--the new Rockefeller--had strong-armed many companies to squelch the competitive threat posed by the Netscape browser.  In 2000 the trial court ordered Microsoft split in two to punish it, and prevent it from future misbehavior. Gates argued that Microsoft always worked on behalf of the consumer, and that splitting the company would diminish

By the 1970s fears of "cutthroat" competition had been displaced by confidence that a fully competitive marketplace produced fair returns to everyone.  As unions faded in strength, the government paid much more attention to the damages that unfair competition could cause to consumers, especially in terms of higher prices, poorer service, and restricted choice.  In 1983 the Reagan administration used the Sherman Act to break up [[ATT]], a nationwide telephone monopoly, into one long-distance company and six regional local service companies, arguing that competition should replace monopoly for the benefit of consumers and the economy as a whole. In 1999 a coalition of 19 states and the federal Justice Department sued Microsoft. A highly publicized trial demonstrated that [[Bill Gates]]--the new Rockefeller--had strong-armed many companies to squelch the competitive threat posed by the Netscape browser.  In 2000 the trial court ordered Microsoft split in two to punish it, and prevent it from future misbehavior. Gates argued that Microsoft always worked on behalf of the consumer, and that splitting the company would diminish

efficiency and slow down the torrid pace of software development.

efficiency and slow down the torrid pace of software development.