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Political origins of antitrust. The Sherman Antitrust Act of 1890 was the political manifestation of strong currents of discontentment among farmers and small business during the Reconstruction era.

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Political origins of antitrust

The Sherman Antitrust Act of 1890 was the political manifestation of strong currents of discontentment among farmers and small business during the Reconstruction era.

Read Columbia Univ. Law Professor Eblen Moglen’s views on the origins of antitrust(pdf format)


Why were farmers angry?

  • Farmers charged that “monopolistic” railroad and grain storage companies charged “unfair” or discriminatory fees.
  • The Grange gave farmers a powerful political voice.

Antitrust enforcement: Who is responsible?

  • The Antitrust Division of the Department of Justice
  • The Federal Trade Commission
  • State Attorney Generals
  • Private firms or individuals suffering injury from acts covered under the antitrust statutes having standing to sue under the Clayton Act, Section 4

Arkansas Attorney General Mark Pryor sued Mylon for price-fixing, a section 1 violation.

FOR IMMEDIATE RELEASE Contact: Michael Teague July 13, 2000 (501) 682-0517 LITTLE ROCK - A lawsuit filed in 1999 by Attorney General Mark Pryor, 32 other state attorneys general, and the Federal Trade Commission (FTC), alleging an illegal astronomical price increase for two drugs used to treat Alzheimer's disease and other disorders, has been settled in principle for $100 million by pharmaceutical giant Mylan Laboratories and three other defendants.

The states and the FTC filed parallel lawsuits to protect consumers from a price-fixing and monopolization scheme led by Mylan. In addition to the amount of restitution and damages of the settlement, Mylan has agreed to restore competitive balance to the pharmaceutical market.

Under terms of the agreement, Arkansas is expected to receive between $1.5 and $2 million to benefit state agencies and consumers who have paid inflated prices for the Mylan products in question. The amount of money Arkansas will receive will be determined in large part by the amount of money Arkansas consumers and state agencies have spent on clorazepate and lorazepam in 1998 and 1999


Congress create a strong incentive for private antitrust litigation

Private antitrust enforcement

  • The Clayton Act, Section 4 permits parties injured by an antitrust violation can collect treble damages—that is, “threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.”
  • Microsoft had to fight a raft of private antitrust suits after its conviction by the Justice Department.
  • Read about the private suit filed by Sun Microsystems
antitrust exemptions
Antitrust exemptions
  • Labor unions are exempt from prosecution under the Clayton Act, Section 6
  • Export associations are exempt under the Webb Pomerene Act of 1918.
  • Agricultural cooperatives of farmers, ranchers, and dairymen are authorized under the Capper Voltstead Act of 1922.
  • Major league baseball got a de facto antitrust exemption from a 1922 Supreme Court Decision. The exemption was later challenged by Cardinals outfielder Curt Flood.