The Sherman Antitrust Act is broken into two main legislative sections, each with the intended goal to control the restraint found in business practices concerning interstate commerce or foreign trade and commerce. In Section 1, companies are outlined as the chief offenders by their practices of trying to restrain interstate trade through negotiations, oral or written, or to conspire in general between rival competitors to achieve a level of market control. Section 2 outlines individuals that seek to monopolize the market for their own benefit. This may also extend to a group of individuals as well.
A monopoly is an economic term used to define complete and utter control within a sector of the economy. The market share is dominated by one person or a set of people that benefit the most, and is inherently devoid of competition. Since the Sherman Antitrust Act aims to promote competition, monopolies are therefore illegal in many ways.
However, for a monopoly to be considered to breach antitrust laws found within the Sherman Act a set of criteria need to be met. First, the individual must be in control of a monopoly and not a perceived monopoly. While a company’s product may appear frequently in the media and every store shelf, that does not necessarily confer the status of a monopoly. The individual or individuals need to be in control of a sole products or products within their business sector.
The next stepping stone to breaking the antitrust laws found within Section 2 of the Sherman Act directly concerns intent. If it is the intent of an individual to gain monopolistic control and then unleash the forces of their monopolistic control on the market, erasing many levels of competition within their business sector, then this would be considered a breach of the Sherman Act.
Yet, some individuals are fortunate enough to come in control of a monopoly by happenstance. A monopoly can develop from the sale of a superior product with respect to the company’s competitors. If this is the case the individual never had a monopolistic intent, but rather an intent to simply create a superior product, and this would not necessarily violate the Sherman Act.
Sometimes there are historical factors at play as well. Ford Motor Company at the turn of the 20th century had a monopoly on the automobile market. Although this was not the original design, Henry Ford developed new technology by creating the assembly line allowing him to mass produce the automobile, in turn giving him a monopoly. However, he never sought to directly squash competitors that would later use his ingenious design leading the way for competition to return in the market. Historical factors combined with technology were at play in this example, and therefore, did not violate the second section of the Sherman Act.
As with many aspects within the field of law, intent is very important. Intent with regards to the second section of the Sherman Antitrust Act is especially important since it has to be there for an activity to be deemed illegal. If not present, the monopolistic nature of a company needs to be examined in much greater depth, and at times, may not be viewed in breach of the Sherman Act.