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The general "trimming back" of antitrust law in the face of economic analysis also resulted in more permissive standards for mergers. [31] In the Supreme Court's 1974 decision United States v. General Dynamics Corp., [32] the federal government lost a merger challenge at the Supreme Court for the first time in over 25 years. [31]
The rule of reason is a legal doctrine used to interpret the Sherman Antitrust Act, one of the cornerstones of United States antitrust law.While some actions like price-fixing are considered illegal per se, other actions, such as possession of a monopoly, must be analyzed under the rule of reason and are only considered illegal when their effect is to unreasonably restrain trade.
In 1982 the U.S. Department of Justice Merger Guidelines introduced the SSNIP test as a new method for defining markets and for measuring market power directly. In the EU it was used for the first time in the Nestlé/Perrier case in 1992 and has been officially recognized by the European Commission in its "Commission's Notice for the Definition of the Relevant Market" in 1997.
Robert Bork was highly critical of court decisions on United States antitrust law in a series of law review articles and his book The Antitrust Paradox. [73] Bork argued that both the original intention of antitrust laws and economic efficiency was the pursuit only of consumer welfare, the protection of competition rather than competitors. [74]
Antitrust laws ensure businesses do not engage in competitive practices that harm other, usually smaller, businesses or consumers. These laws are formed to promote healthy competition within a free market by limiting the abuse of monopoly power.
Standard Oil (Refinery No. 1 in Cleveland, Ohio, pictured) was a major company broken up under United States antitrust laws.. The history of United States antitrust law is generally taken to begin with the Sherman Antitrust Act 1890, although some form of policy to regulate competition in the market economy has existed throughout the common law's history.
Named after economists Orris C. Herfindahl and Albert O. Hirschman, it is an economic concept widely applied in competition law, antitrust regulation, [1] and technology management. [2] HHI has continued to be used by antitrust authorities, primarily to evaluate and understand how mergers will affect their associated markets. [3]
The Celler–Kefauver Act is a United States federal law passed in 1950 that reformed and strengthened the Clayton Antitrust Act of 1914, which had amended the Sherman Antitrust Act of 1890. The Celler–Kefauver Act was passed to close a loophole regarding asset acquisitions [1] and acquisitions involving firms that were not direct competitors.