Cheers to Competition: 120 Years of the Sherman Act

The following post appears courtesy of the Antitrust Division. U.S. history is filled with great achievements that deserve celebration. The enactment of the Sherman Antitrust Act in 1890 is certainly one of them. Most of us learned about, or at least heard of, the Sherman Act at some point in our lives (most likely in our fifth grade U.S. history class). And, we know it had something to do with the breaking up of Standard Oil Company. But then, what? How is this 120-year-old law relevant to us in the 21st> century when we rarely hear about “trusts” these days? Despite its anachronistic name, the Sherman Antitrust Act touches every aspect of a modern consumer’s life. The Act is, at its core, the law to protect competition and thereby enhance consumer welfare. And, as the U.S. and global markets have grown tremendously since their inception, the Sherman Act is ever more relevant and critical in our daily life. That means when we pay phone bills, buy flat screen TVs or frozen packaged goods, the Sherman Act plays a role in preventing companies from illegally monopolizing and colluding and artificially setting prices. As an enforcer of the Act, the Antitrust Division of the Department of Justice protects competition by preventing the artificial raising of prices through the merging of competing entities, price-fixing, or bid-rigging, and prohibiting a company from using its market dominance to stifle competition. For example, the division brought a landmark case against Microsoft involving computer operating systems and recently investigated a real estate executive for conspiring to rig bids at public real estate foreclosure auctions. The rigorous enforcement of the Sherman Act deters companies from engaging in anticompetitive behavior. As a result, companies have to compete to provide better products and services in order to attract more business, which gives consumers more and better options. So, you now see why the Sherman Act was one of America’s greatest achievements. On April 20, in commemorating the 120th Anniversary of the Sherman Act, the Attorney General will present the 2010 John Sherman Award to Professor Robert Pitofsky. The division’s highest honor is given to those who have made outstanding and substantial contributions to the protection of American consumers and the preservation of economic liberty.