What is the Sherman Anti Trust Act?

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enotechris eNotes educator| Certified Educator

The Sherman Anti-Trust Act of 1890 was the first law passed by the Federal Government prohibiting trusts.  The law forbid companies that were “in the form of trust or otherwise that was in restraint of trade or commerce among the several states, or with foreign nations.” Back then, the term "trust" included the practice of stockholders from several companies transferring their stock to a set of trustees, who would distribute the consolidated earnings of the jointly managed companies.  By creating trusts, various companies in a given industry began to work as one entity, which then lead to near monopolies, which are antithetical to a free market.  The most recent significant enforcement of the Act occurred over 100 years after it was written, when the Federal Government in the 1990's brought suit against the Microsoft Corporation.  See more details at the link:


Yojana_Thapa | Student

The Sherman Antitrust Act of 1890 was the act that forbade unreasonable combinations or contracts in restraint of trade. It had little immediate impact on the regulation of large corporations. During the last decade of the 18th century the use of the act was to curb labor unions.

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