Sherman Anti-Trust Act (1890

The Sherman Anti-Trust Act, signed by President Benjamin Harrison on July 2, 1890, was the first federal law aimed at curbing monopolies and trusts. It responded to the growing power of arrangements that put multiple companies under common control, such as Standard Oil’s trust, which coordinated firms and profits in ways that suppressed competition. Building on Congress’s authority over interstate commerce, the law made contracts, combinations, and conspiracies that restrained trade across state or national borders illegal. It also prohibited monopolizing, or attempting or conspiring to monopolize, such commerce. Violators faced fines of up to $5,000 and as much as one year in prison; the federal government could seek court orders to stop violations, and injured individuals or businesses could sue for triple damages.

Despite overwhelming support in Congress, the act’s broad language left key terms undefined, limiting its early reach. In 1895, the Supreme Court ruled that control over manufacturing did not necessarily amount to control over trade, allowing a sugar company with about 98 percent of U.S. refining capacity to escape liability. The decision appeared to constrain federal action, but the law later became a major enforcement tool. Courts upheld the dissolution of Northern Securities in 1904, and the government used the act against Standard Oil and American Tobacco by 1911. It was also invoked in the late 1990s against Microsoft, demonstrating the act’s continuing role in efforts to protect competition.