Sections 1 and 2 of the Sherman Act

Sections 1 and 2 of the Sherman Act
Name	Sections 1 and 2 of the Sherman Act
Enacted	1890
Statute	Sherman Antitrust Act
Codified	15 U.S.C. §§ 1–2
Jurisdiction	United States

Sections 1 and 2 of the Sherman Act

Sections 1 and 2 of the Sherman Act are the core federal prohibitions against restraints of trade and monopolization enacted by the United States Congress in 1890. These provisions have shaped litigation and policy by the United States Congress, the Supreme Court of the United States, the Department of Justice (United States), and the Federal Trade Commission across landmark disputes involving firms such as Standard Oil, American Tobacco Company, AT&T, and Microsoft. Their interpretation touches doctrinal developments from the Sherman Antitrust Act to modern enforcement actions involving corporations like Google, Amazon (company), Apple Inc., and Facebook.

Introduction and Overview

Sections 1 and 2 originate in the Sherman Antitrust Act and are codified at 15 U.S.C. §§ 1–2, forming the statutory backbone for competition policy adjudicated by the Supreme Court of the United States, applied by the United States Department of Justice Antitrust Division, and supplemented by regulatory agencies such as the Federal Trade Commission (FTC). Section 1 prohibits concerted actions among parties and has been construed through precedents including United States v. Socony-Vacuum Oil Co. and Arizona v. Maricopa County Medical Society, while Section 2 targets single-firm conduct and has been illuminated by decisions such as United States v. Microsoft Corp. and United States v. Grinnell Corp.. Both sections interact with statutory frameworks like the Clayton Antitrust Act and remedial tools such as equitable relief in Standard Oil Co. of New Jersey v. United States.

Section 1: Unreasonable Restraints of Trade

Section 1 forbids “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade,” a provision interpreted through doctrines including the per se rule, the rule of reason, and harsh scrutiny applied in cases such as National Society of Professional Engineers v. United States and Maple Flooring Manufacturers' Association v. United States. The per se approach, applied in matters like price-fixing and market allocation adjudicated in United States v. Trenton Potteries Co. and FTC v. Superior Court Trial Lawyers Association, contrasts with the rule of reason used in complex restraints assessed in Board of Trade of City of Chicago v. United States and Leegin Creative Leather Products, Inc. v. PSKS, Inc.. Section 1 claims frequently arise in cartel prosecutions involving defendants pursued under the Department of Justice (United States) criminal enforcement program and in civil suits initiated by plaintiffs such as state attorneys general including those from New York (state), California, and Texas.

Section 2: Monopoly and Attempted Monopolization

Section 2 prohibits monopolization, attempted monopolization, and conspiracies to monopolize; its standards have been articulated in landmark rulings like United States v. Grinnell Corp., which defined monopoly power and exclusionary conduct, and United States v. Microsoft Corp., which examined novel platform conduct and remedies. Courts evaluate market power using market definition concepts from Brown Shoe Co. v. United States and consider exclusionary practices such as predatory pricing discussed in Matsushita Electric Industrial Co. v. Zenith Radio Corp. and Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.. Attempted monopolization claims require proof of specific intent and dangerous probability of success as developed in jurisprudence involving corporate defendants like Intel Corporation and American Telephone and Telegraph Company.

Enforcement and Remedies

Enforcement of Sections 1 and 2 is public and private: the United States Department of Justice Antitrust Division and the Federal Trade Commission initiate civil and criminal actions, while private plaintiffs pursue treble damages under the Clayton Antitrust Act and equitable relief in district courts such as the United States District Court for the Southern District of New York. Remedies include injunctions as ordered in Standard Oil Co. of New Jersey v. United States, divestiture decrees exemplified by the breakup of AT&T Corporation, criminal fines and imprisonment in cartel prosecutions like those against participants in the Vitamin cartel or Lysine price-fixing conspiracy, and disgorgement in matters reviewed by the Supreme Court of the United States.

Judicial Standards and Key Doctrines

Judicial standards governing Sections 1 and 2 encompass the per se rule, the rule of reason, market definition and market power analyses derived from cases such as Brown Shoe Co. v. United States and Eastman Kodak Co. v. Image Technical Services, Inc., and doctrines addressing vertical restraints in Leegin Creative Leather Products, Inc. v. PSKS, Inc. and Continental T.V., Inc. v. GTE Sylvania Inc.. The essential facilities doctrine, tied to precedents like Otter Tail Power Co. v. United States, and the tied-selling jurisprudence from Jefferson Parish Hospital District No. 2 v. Hyde influence assessments of exclusionary conduct, while anticompetitive intent and competitive effects are balanced under standards articulated in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. and Matsushita Electric Industrial Co. v. Zenith Radio Corp..

Significant Cases and Precedents

Prominent decisions that shaped Sections 1 and 2 include Standard Oil Co. of New Jersey v. United States, United States v. American Tobacco Co., United States v. Socony-Vacuum Oil Co., United States v. Microsoft Corp., Brown Shoe Co. v. United States, United States v. Grinnell Corp., and Leegin Creative Leather Products, Inc. v. PSKS, Inc.. Additional influential matters include Continental T.V., Inc. v. GTE Sylvania Inc., Otter Tail Power Co. v. United States, Eastman Kodak Co. v. Image Technical Services, Inc., Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., and Matsushita Electric Industrial Co. v. Zenith Radio Corp., each of which contributed to doctrines applied in enforcement actions against firms such as Microsoft, AT&T, Standard Oil, American Tobacco Company, Intel Corporation, Google LLC, and Amazon (company).

Category:United States antitrust law