Federal Antiturst, Economic Freedom, and the Uncertain Conduct Requirement in Section 2 of the Sherman Antitrust Act: Toward a More Objective Approach
Following the Civil War in the United States, American industry embarked upon a period of "truly remarkable economic growth.” In several respects economic expansion was beneficial to the general population, as commerce spread to new frontiers through development of canal and railroad systems.
Concurrently, however, rapid economic growth by the late 1880's brought popular objection to large business enterprises and their ability to devour local businesses and manipulate merger schemes. Trusts had become anathema well before Congress considered any legislative remedy.
The Sherman Antitrust Act was one response to public opinion' that was increasingly adverse to large business conglomerates. With little debate and by almost unanimous consent of Congress, the Act became law in July, 1890.
Section Two deems it illegal for any person to monopolize any part of the “trade or commerce among the states or with foreign nations.” That section does not, however, either define “monopolize” or delineate what types of conduct are indicative of monopolistic behavior. Those tasks have been left to the courts.
With certain specific and rather narrow exceptions, there exists little definite statement as to what constitutes unlawful or monopolistic conduct under Section Two. Professor Sullivan has articulated three concerns which he believes should be addressed when forming any test of unlawful conduct:
First, [the test] should discriminate between conduct which is harmful in some economic sense, and conduct which is not; second, it ought to discriminate between alternative courses of action in the market in a manner which would be meaningful to an actor there …; third, it should not ban conduct which is no more than the rational response of a business manager seeking to maximize profits, sales, or revenues.
Professor Sullivan emphasizes, therefore, criteria which focus on the requirements and goals of any actor within the market. Also, the criteria outlined above gives rise to a more objective (“reasonable business manager”) test for analyzing a particular firm's response to the practical demands of the market. Inherent in such an analysis is a necessity to distinguish between normal aggressive conduct that does not violate Section Two from that sort of conduct which does.
This comment will examine judicial decisions wherein conduct violations of Section Two have been alleged. This examination and analysis will necessarily be at least as economic as it will be legal. Next, the comment will outline what may be perceived as a subtle shift towards a more objective approach by the courts in certain antitrust actions. Finally, the comment will present a test that addresses the concerns outlined by Professor Sullivan.
Corbin, Charles R. Jr.
"Federal Antiturst, Economic Freedom, and the Uncertain Conduct Requirement in Section 2 of the Sherman Antitrust Act: Toward a More Objective Approach,"
University of Dayton Law Review: Vol. 7:
1, Article 5.
Available at: https://ecommons.udayton.edu/udlr/vol7/iss1/5