Anti Trust

A Look Into Attempts to Monopolize

A Look Into Attempts to Monopolize

The Sherman Antitrust Act of 1890, which has been employed many a time in Federal courts across the country, seeks to promote free market interstate trade thereby making an effort to limit market restraints. Section 2 of the Sherman Act addresses an individual’s role in what can now be considered illegal business activities.

An attempt to monopolize a market is one of the chief concerns of Section 2 and puts the responsibility of such an act on the individual. Instead of the first section, which brings into question the roles of companies colluding to form a horizontally integrated market, the second section will delineate what makes a monopoly illegal in the American free market system.

There happen to be many examples of attempts to monopolize the market within a particular sector of the economy.  The first major case brought before the courts dealt with John Rockefeller’s Standard Oil Company. Written in 1890 by Senator John Sherman, the Act was intended to address the declining amount of competition within US industry. Rockefeller’s attempt to monopolize the oil market would prove that Sherman’s assessment was spot on.

By mid-1900 Standard Oil had complete control of the refining process and delivery process within the oil industry. He also outwitted many of his competitors turning waste into profit in many cases since crude oil has many different byproducts. However, his attempt to monopolize the market, more specifically his family’s since by 1918 when Standard Oil was to appear before the Supreme Court he had already stepped down as Chairman, was brought to an end.

A litany of charges was brought against Standard Oil, from corporate espionage to the use of secret railways. These acts were engaged in by the company, with the direction coming from the individuals at the top causing the case to both violate the first and second sections of the Sherman Act.

Yet another monopoly of the time was forming led by one of Rockefeller’s contemporaries, however the circumstances were quiet different. For Rockefeller, an individual, he knowingly attempted to monopolize the oil market restraining free market interstate commerce. It was his clear intent to become not only the leader in oil refining, but to be the sole provider of refined oil. Henry Ford invented the assembly line for automobiles, a technological first of the time and a historical moment.

Equally Ford never made an effort to monopolize the automobile market. He had just created a better system and would benefit over the coming years, dominating the market share. Nor did he use his monopolistic power to crush competitors. Once his patent ran out on the assembly line, it was free for anyone to copy. His example shows the difference of intent in attempts to monopolize the market. Intent, for the courts, would become one of the main reasons to break up a monopoly.

Not all monopolies are guilty of breaking the Sherman Act. Henry Ford’s company certainly did not infringe against antitrust laws. His monopoly was formed by a historic technological breakthrough. On the other hand, due to the intent of the Rockefellers to dominate the oil market, implicitly and explicitly forming a monopoly, Standard Oil was found to be break the antitrust laws found within the Sherman Act.




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