Clayton Antitrust Act


The Clayton Act addresses specific practices that the Sherman Act does not clearly prohibit, such as mergers and interlocking directorates (that is, the same person making business decisions for competing companies). Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly." As amended by the Robinson-Patman Act of 1936, the Clayton Act also bans certain discriminatory prices, services, and allowances in dealings between merchants. The Clayton Act was amended again in 1976 by the Hart-Scott-Rodino Antitrust Improvements Act to require companies planning large mergers or acquisitions to notify the government of their plans in advance. The Clayton Act also authorizes private parties to sue for triple damages when they have been harmed by conduct that violates either the Sherman or Clayton Act and to obtain a court order prohibiting the anticompetitive practice in the future.http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws

Clayton Antitrust Act, 1914, passed by the U.S. Congress as an amendment to clarify and supplement the Sherman Antitrust Act of 1890. It was drafted by Henry De Lamar Clayton. The act prohibited exclusive sales contracts, local price cutting to freeze out competitors, rebates, interlocking directorates in corporations capitalized at $1 million or more in the same field of business, and intercorporate stock holdings. Labor unions and agricultural cooperatives were excluded from the forbidden combinations in the restraint of trade. The act restricted the use of the injunction against labor, and it legalized peaceful strikes, picketing, and boycotts. It declared that "the labor of a human being is not a commodity or article of commerce." Organized labor was as heartened by the act as it had been dejected by the doctrine of the Danbury Hatters' Case, but subsequent judicial construction weakened the act's labor provisions. The Clayton Antitrust Act was the basis for a great many important and much-publicized suits against large corporations. Later amendments to the act strengthened its provisions against unfair price cutting (1936) and intercorporate stock holdings (1950).

The Columbia Electronic Encyclopedia, 6th ed. Copyright 2012, Columbia University Press. All rights reserved.

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