The Sherman Antitrust Act of 1890, as amended, prohibits every contract, combination, or conspiracy in restraint of trade and allows for the imposition of substantial penalties for violations thereof. The Act is named after Senator John Sherman, who first proposed the Act to address growing concern over the rapidly increasing prominence of large corporations, corporate trusts and business combinations in the US economic landscape toward the end of the nineteenth century. Set forth at Title 15, §§ 1-7 of the US Code, the Sherman Act finds its basis in Congress' constitutional power to regulate interstate commerce and was enacted at a time when the only similar laws were state statutes governing intrastate businesses.
Although the Sherman Act had immediate potential to aid the federal government in addressing concerns over increasing corporate power, its potential was not realized for several years. Initially, Supreme Court decisions effectively prevented its utilization by the federal government, and thereafter, Congress only gradually put in place the supporting legislation and agencies necessary to successfully challenge anticompetitive activities. This building process began in 1904, as President Theodore Roosevelt launched his "trust-busting" campaigns and the Supreme Court found in favor of the federal government, dissolving the Northern Securities Company. The reach of the Sherman Act increased during the Taft and Wilson administrations, with the enactment of the Clayton Antitrust Act and the establishment of the Federal Trade Commission in 1914. Further, the addition of supplementary legislation, such as the Robinson-Patman Act during President Franklin Delano Roosevelt's administration, continued to improve the ability of federal government to challenge corporate actions on antitrust grounds. Finally, as federal antitrust agencies began broadening their interpretations of the antitrust statutes in the 1980s and 1990s, antitrust enforcement reached new heights, beginning with the 1982 breakup of the AT&T monopoly, and culminating with the widely publicized Microsoft Case.
§1 Sherman Act, 15 U.S.C. §1 . Trusts, etc., in restraint of trade illegal; penalty.