Monopolies and Antitrust Law

Impatience with these rulings and the slow pace of enforcement led to further reforms in 1914. Congress clarified the law with an explicit new statute, the Clayton Act, which spelled out four illegal anticompetitive practices. It prohibited discriminating by selling the same product or service at different prices to similar buyers, forcing buyers to enter exclusive contracts, dominating markets through corporate mergers, and sharing common board members between competing companies. Yet even the Clayton Act still left much uncertain, emphasizing that its forbidden practices were only illegal if the effect "may be substantially to lessen competition" or "tend to create a monopoly." Additionally, in 1914, Congress created the Federal Trade Commission (FTC), the federal agency charged with enforcing antitrust law. The Federal Trade Commission Act also showed the unwillingness of Congress to be too specific about antitrust, aiming broadly at "unfair methods of competition."

Legislative changes peaked toward the middle of the twentieth century as Congress strengthened and refined aspects of the Clayton Act. In 1936, the Robinson-Patman Act tightened the earlier law's ban on price discrimination. The last major piece of federal legislation was the Celler-Kefauver Antimerger Act of 1950, which closed loopholes in the Clayton Act's restriction on mergers, preventing anticompetitive purchases of rival businesses' assets and deceitful transfers of stock purchases.

Throughout the twentieth century, Congress has done less to influence antitrust law than have the executive and the judicial branches. Federal enforcement, which belongs to the FTC and the Justice Department, depends entirely on the political mood of a given presidential administration. President Theodore Roosevelt, a self-declared "trustbuster," made vigorous enforcement a priority at the turn of the century, as did his successor, William Howard Taft. The pendulum swung in the 1920s under the noninterventionist policies of President Calvin Coolidge, and then back again in the 1930s when President Franklin D. Roosevelt hotly pursued monopolies. Even in recent decades, politics have governed enforcement. The deregulatory Reagan era had little taste for antitrust cases, but the Clinton years have shown a renewed appetite. At all times, the Supreme Court has had the most definitive influence. This reflects a kind of legislative design, as Congress intentionally crafted the outline rather than the details of antitrust law. Through a vast body of federal cases, the Court has filled in the blanks with a complex set of rules, exceptions and doctrines. And yet its approach has been in nearly constant flux.