When these large companies have too much power, they are able to completely run the market based on their own agendas. Should smaller companies still exist, the larger firms are able to lower prices and absorb the loss from it where the other company would inevitably fail to compete with the low prices of the firm. Firms like Carnegie Steel and Standard Oil rightfully took advantage of the US free market at the time, but once word of their predatory practices became publically known, these companies received penalties from the federal government.
In 1890, the Sherman Antitrust Act was the first mass legislation passed to address oppressive business practices and monopolies. This act was in response to the aggressive business tactics. Although many individual states already enacted similar laws, they were limited by intrastate commerce. However the Sherman Antitrust Act was founded on constitutional power of US Congress to control intrastate commerce. It was succeeded through a Senate vote of 51 to 1, and a unanimous vote of 242 to 0 in the House of Representatives, and finally the law was signed by President Benjamin Harris. The Sherman Antitrust Act said that “every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony. And it established penalties for persons convicted of establishing such combinations: ". . . shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court." (Society for Human...
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...age used in the Sherman Antitrust Act proved it easy for companies to find legal loopholes, allowing them to engage in otherwise restricted business. The Clayton Antitrust Act was introduced in 1914 to clarify the principles the Sherman Antitrust Act set out to do. While the Sherman Antitrust Act said that monopolies were illegal, the Clayton Antitrust Act “defined as illegal certain business practices that are conducive to the formation of monopolies or that result from them. For example, specific forms of holding companies and interlocking directorates were forbidden.” (Britanica) This legislation was influential and was used to dissolve many monopolies in years to come.
AT&T began as a government organized monopoly, and was highly profitable and successful. However, the company lost its backing in 1980 when they were faced with charges against the Anti Sherman Act
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