Congress created the 1914 antitrust laws to override judicially invented purpose tests

Evidence

The Federal Trade Commission Act and the Clayton Act were designed to further the purposes of the Sherman Anti-Trust Act to curb the growth of monopoly power and preserve the play of free competition. They sought to do this by removing some of the limitations which defective wording and judicial construction had placed upon the original act. The force of the Sherman Act, for example, had been dissipated by the “rule of reason” announced by the Supreme Court in the Standard Oil case. Standard Oil Comar of New Jersev. United States, 221 U.S. 1 (19l1). Not only did the Court hold that only unreasonable restraints of trade were illegal but, as the test of reasonableness was applied, it became clear that reasonableness or unreasonableness depended often on the purpose of the corporation or corporations who imposed the restraint. The 1914 statutes sought to eliminate many of these nice questions.abouit who expresses the purposes of a huge corporation by defining certain objective practices as illegal. They sought, moreover, to prohibit some practices, irrespective of whether they had resulted in a restraint of trade, because of their tendency to produce that evil. — Henry M. Hart, Jr. and Albert M. Sacks, The Legal Process, 545

Categorization

  • XREF: Directly serves the law-and-institutions thread: legislative response to judicial interpretive narrowing is a core institutional dynamic. — connects to: Exclusive-dealing contracts can violate the law through practical effect, not only express words — Henry M. Hart, Jr. and Albert M. Sacks, The Legal Process: Basic Problems in…, 537; Predatory price cuts harm competition regardless of the seller’s intent — Henry M. Hart, Jr. and Albert M. Sacks, The Legal Process: Basic Problems in…, 564; Congress deliberately delegated antitrust law creation to the courts via broad statutory language — Frederick Schauer, Thinking Like a Lawyer, 273 (+1 more)
  • DEFINE: Explains what ‘rule of reason’ did and why 1914 statutes replaced subjective-purpose tests with objective-practice prohibitions.

Broader Connections