Clayton Anti Trust Act Flashcards, test questions and answers

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What is Clayton Anti Trust Act?

The Clayton Anti-Trust Act of 1914 was a major piece of legislation passed by the United States Congress in order to protect competition and promote consumer welfare. The act was created as an amendment to the Sherman Anti-Trust Act, which had been passed in 1890. The Clayton Act helped to expand the scope of the Sherman Act, making it easier for governments to break up large corporations and monopolies that used unfair practices to dominate markets. The Clayton Act prohibited companies from using certain types of unfair practices, such as price discrimination, exclusive dealing agreements and tying arrangements designed to limit competition. It also provided stronger penalties for violations of anti-trust laws and prohibited interlocking directorates between competitors so that one company could not control another through its board members. In addition, the act required companies with more than $1 million in assets or sales to report their operations annually so that government regulators could be aware of any potential anti-competitive behavior. The Clayton Anti-Trust Act has been credited with helping maintain competition in US markets and promoting consumer welfare by regulating corporate behavior in an effort to prevent monopoly pricing power from dominating industries. It is widely viewed as a successful piece of legislation which has benefited consumers across America over the past century.