Clayton Antitrust Act of 1914: Difference between revisions

The '''Clayton Antitrust Act of 1914''' ({{USStatute|63|212|38|730|1914|10|15}}, codified at {{usc|15|12|27}}, {{usc|29|52|53}}), wasis a part of [[United States antitrust law]] with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act soughtseeks to prevent anticompetitive practices in their [[wiktionary:incipience|incipiency]]. That regime started with the [[Sherman Antitrust Act]] of 1890, the first Federal law outlawing practices consideredthat were harmful to consumers (monopolies, cartels, and trusts). The Clayton Act specified particular prohibited conduct, the three-level enforcement scheme, the exemptions, and the remedial measures. Like the Sherman Act, much of the substance of the Clayton Act has been developed and animated by the [[Federal judiciary of the United States|U.S. courts]], particularly the [[Supreme Court of the United States|Supreme Court]].

Since the [[Sherman Antitrust Act]] of 1890, courts in the United States had interpreted the law on cartels as applying against [[trade unions]]. This had created a problem for this site has false information!!workers, who needed to organize to balance the [[collective bargaining|equal bargaining power]] against their employers. The Sherman Act had also triggered the largest wave of [[merger]]s in US history, as businesses realized that instead of creating a [[cartel]] they could simply fuse into a single [[corporation]], and have all the benefits of [[market power]] that a cartel could bring. At the end of the [[William Howard Taft|Taft]] administration, and the start of the [[Woodrow Wilson]] administration, a ''[[Commission on Industrial Relations]]'' was established. During its proceedings, and in anticipation of its first report on October 23, 1914, legislation was introduced by [[Alabama]] [[U.S. Democratic Party|Democrat]] [[Henry De Lamar Clayton Jr.]] in the U.S. House of Representatives. The Clayton Act passed by a vote of 277 to 54 on June 5, 1914. Though the Senate passed its own version on September 2, 1914, by a vote of 46–16, the final version of the law (written after deliberation between [[U.S. Senate|Senate]] and the [[U.S. House of Representatives|House]]), did not pass(DO NOT TRUST THIS SITE PEOPLE!) the Senate until October 56 and the House until October 8 of the next year1914.

The Clayton Act made both substantive and procedural modifications to federal antitrust law. Substantively, the act seeks to capture anticompetitive practices in their incipiency by prohibiting particular types of conduct, not deemed in the best interest of a competitive market. There are 4 sections of the bill that proposed substantive changes in the antitrust laws by way of supplementing the Sherman Antitrust Act of 1890. In those sections, the Act thoroughly discusses the following four principles of economic trade and business:

* any person from being a [[Board of directors|director]] of two or more competing corporations, if those corporations would violate the anti-trustantitrust criteria by merging (Act Section 8; codified 1200 at {{usc|15|19}}).

Section 7 elaborates on specific and crucial concepts of the Clayton Act; "[[holding company]]" defined as "a company whose primary purpose is to hold stocks of other companies",<ref name="Martin" /> which the government saw as a "common and favorite method of promoting monopoly"<ref name="Martin">Martin, David Dale, Mergers and the Clayton Act, University of California, Berkeley and Los Angeles, 1959</ref> and a mere corporated form of the 'old fashioned' trust. Section 7 prohibits acquisitions where the effect may be substantially to lessen competition, or to tend to create a monopoly.

Section 7a, {{usc|15|18a}}, requires that companies notify the [[Federal Trade Commission]] and the [[United States Assistant Attorney General|Assistant Attorney General]] of the [[United States Department of Justice Antitrust Division]] of any contemplated [[mergers and acquisitions]] that meet or exceed certain thresholds. Pursuant to the [[Hart–Scott–Rodino Antitrust Improvements Act]], section 7A(a)(2) requires the Federal Trade Commission to revise those thresholds annually, based on the change in [[gross national product]], in accordance with Section 8(a)(5) and take effect 30 days after publication in the Federal Register. (For example, see {{USFedReg|74|1687}} and [http://www.access.gpo.gov/nara/cfr/waisidx_09/16cfr801_09.html {{USCFR|16 C.F.R. |801]}}.)

An important difference between the Clayton Act and its predecessor, the Sherman Act, is that the Clayton Act contained safe harbors for union activities. Section 6 of the Act (codified at {{usc|15|17}}) exempts [[trade union|labor unions]] and agricultural organizations, saying "that the labor of a human being is not a commodity or article of commerce, and permit[ting] labor organizations to carry out their legitimate objective". Therefore, [[boycott]]s, peaceful [[strike action|strikes]], peaceful [[Picketing (protest)|picketing]], and [[collective bargaining]] are not regulated by this statute. Injunctions could be used to settle labor disputes only when property damage was threatened. The [[AFL–CIO|AFL]] strongly supported Section 6 of the Act, with AFL head Samuel Gompers describing the law as "Labor's Magna Charta" or "Bill of Rights."<ref>{{Cite journal|last=Mason|first=Alpheus T.|date=August 1924|title=The Labor Clauses of the Clayton Act|url=https://www.cambridge.org/core/product/identifier/S0003055400109025/type/journal_article|journal=American Political Science Review|language=en|volume=18|issue=3|pages=489–512|doi=10.2307/1944172|jstor=1944172 |s2cid=147281286 |issn=0003-0554}}</ref>

Procedurally, the Act empowers private parties injured by violations of the Act to sue for treble damages under Section 4 and injunctive relief under Section 16. The Supreme Court has expressly ruledheld that thedivestiture is a form of "injunctive relief" clauseauthorized inby Section 16.<ref>"There includesbeing nothing in the impliedsection powerthat restricts, courts' equitable jurisdiction, the provision should be construed generously and flexibly to forceenable defendantsa chancellor to divestimpose assetsthe most effective, usual, and straightforward remedy to rescind an unlawful stock purchase.<ref>" ''California v. American Stores Co.'', {{ussc|495|271|1990}}.</ref>

Under the Clayton Act, only civil suits could be brought to the court's attention and a provision "permits a suit in the federal courts for three times the actual damages caused by anything forbidden in the antitrust laws",<ref>{{cite book |lastlast1=Kintner |last2=Joelson |title=An International Antitrust Primer |location=New York |publisher=Macmillan |year=1974 |page=[https://archive.org/details/internationalant00kint/page/20 20] |isbn=0-02-364380-3 |url-access=registration |url=https://archive.org/details/internationalant00kint/page/20 }}</ref> including court costs and attorney's fees.

* {{cite web|title=Clayton Antitrust Act|url=http://www.infoplease.com/ce6/history/A0812484.html|publisher=Pearson Education|accessdateaccess-date=19 January 2012}}

*[https://web.archive.org/web/20070925195746/http://economics.gmu.edu/working/WPE_98/98_03.pdf Why Did The Clayton Act Pass? An Analysis of the Interest Group Hypothesis] (PDF)

[[Category:1914 in American law]]