federal laws designed to improve market efficiency, encourage competition, and curtail unfair trade practices. This is accomplished by reducing barriers to entry, breaking up monopolies, and preventing conspiracies to restrict production or raise prices. There are three major antitrust laws: the sherman antitrust act of 1890, clayton antitrust act of 1914, and Federal Trade Commission Act of 1914.
legislation designed to prevent monopolies or business practices limiting free market competition. Although some 40 states have adopted such legislation, the more important acts are these federal laws: (1) the Sherman Antitrust Act of 1890, which outlawed monopolies, restraints of trade, and business combinations (called trusts) created for the sole purpose of restricting competition, though it did not define these terms; (2) the Federal Trade Commission Act of 1914, creating the Federal Trade Commission, a federal agency with power to regulate interstate commerce, investigate business activities (except those by banks) and issue enforcement orders; (3) the Clayton Antitrust Act of 1914 and amendments, which banned tie-in contracts, interlocking directorates, and certain types of holding company acquisitions.
The U.S. Department of Justice and bank supervisory agencies look closely at deposit account concentration or the market share an acquirer would gain from a merger. Local deposit share, in an era of nationwide banking and convenient access to non-local banks, is one of several factors the banking regulators examine when approving a merger application. The bank agencies also review mergers for their impact on financial stability and ability to deliver banking services to local communities.
federal legislation designed to prevent monopolies and restraint of trade. Landmark statutes include
- the Sherman Anti-Trust Act of 1890, which prohibited acts or contracts tending to create monopoly and initiated an era of trustbusting.
- the Clayton Anti-Trust Act of 1914, which was passed as an amendment to the Sherman Act and dealt with local price discrimination as well as with the interlocking directorates. It went further in the areas of the holding company and restraint of trade.
- the Federal Trade Commission Act of 1914, which created the Federal Trade Commission or FTC, with power to conduct investigations and issue orders preventing unfair practices in interstate commerce.
federal and state acts to protect trade and commerce from monopolies and restrictions.
Example: In the early 1960s several real estate boards required all members to charge the same rate of commission. Some boards were found to be in violation of antitrust laws. Now there are no boards that require specific commission rates.
