History of United States antitrust law
Although "trust" had a technical legal meaning, the word was commonly used to denote big business, especially a large, growing manufacturing conglomerate of the sort that suddenly emerged in great numbers in the 1880s and 1890s.
From hounding and driving prosperous businessman to beggery and suicide, to holding up and plundering widows and orphans, the little dealer in the country and the crippled peddler on the highway—all this is entered into the exploits of this organized gang of commercial bandits.
Tennessee, Illinois, Kentucky and Kansas took the lead in 1904–1905, followed by Arkansas, Iowa, Maryland, Minnesota, Mississippi, Nebraska, Ohio, Oklahoma, Texas and West Virginia.
Taft's cases included many leading firms in major sectors: Standard Oil; American Tobacco; United States Steel; Aluminum Company of America; International Harvester; National Cash Register; Westinghouse; General Electric; Kodak; Dupont; Union Pacific railroad; and Southern Pacific railroad.
The media gave extensive exposure, especially to cases against Standard Oil and American Tobacco, which reached directly tens of millions of consumers.
Taft's attorney general George W. Wickersham personally supervised the most important cases against Standard Oil and American Tobacco.
In 1914, Congress passed the Clayton Antitrust Act to increase the government's capacity to intervene and break up big business.
In fact, it lobbied for tariff protection that reduced competition, and so contending that it was one of the "good trusts" that benefited the economy is somewhat doubtful.
Likewise, International Harvester survived its court test, but other trusts in the tobacco, meatpacking, and bathtub fixture industries were broken up.
In 1914 Congress passed the Clayton Act, which prohibited specific business actions (such as price discrimination and tying) if they substantially lessened competition.
The National Industrial Recovery Act (NIRA) 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.
[13] One view of the statutory purpose, urged for example by Justice Douglas, was that the goal was not only to protect consumers, but at least as importantly to prohibit the use of power to control the marketplace.
It should be scattered into many hands so that the fortunes of the people will not be dependent on the whim or caprice, the political prejudices, the emotional stability of a few self-appointed men...That is the philosophy and the command of the Sherman Act.
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.
AT&T was broken up into one long-distance company and seven regional "Baby Bells", arguing that competition should replace monopoly for the benefit of consumers and the economy as a whole.
The pace of business takeovers quickened in the 1990s, but whenever one large corporation sought to acquire another, it first had to obtain the approval of either the FTC or the Justice Department.
A highly publicized trial found that Microsoft had strong-armed many companies in an attempt to prevent competition from the Netscape browser.
During his defense, CEO Bill Gates argued that Microsoft always worked on behalf of the consumer and that splitting the company would diminish efficiency and slow the pace of software development.
