Trusts and monopolies are concentrations of wealth in the hands of a few. Such conglomerations of economic resources are thought to be injurious to the public and individuals because such trusts minimize, if not obliterate normal marketplace competition, and yield undesirable price controls. These, in turn, cause markets to stagnate and sap individual initiative.

To prevent trusts from creating restraints on trade or commerce and reducing competition, Congress passed the Sherman Antitrust Act in 1890. The Sherman Act was designed to maintain economic liberty, and to eliminate restraints on trade and competition. The Sherman Act is the main source of Antitrust law.

The Sherman Act is a Federal statute and as such has a scope limited by Constitutional constraints on the Federal government. The commerce clause, however, allows for a very wide interpretation and application of this act. The Act applies to all transactions and business involved in interstate commerce. If the activities are local, the act applies to transactions affecting interstate commerce. The latter phrase has been interpretted to allow broad application of the Sherman Act.

Most if not all states have comparable statutes prohibiting monopolistic conduct, price fixing agreements, and other acts in restraint of trade having strictly local impact. See, for example, the Massachusetts Antitrust Act.

Retrieved from "http://www.law.cornell.edu/wex/index.php/Antitrust"