The Sherman Antitrust Act of 1890 was proposed by Senator John Sherman of Ohio to present a solution for companies trying to monopolize production and trade between nations. This act included two major provisions: first, to restrict and outlaw all combinations that restrain trade between states or foreign nations, and second, to determine all attempts to monopolize any part of trade or commerce illegal. These new restrictions allow for smaller companies to stay afloat and not worry about being acquired or driven to irrelevance due to companies taking too great of a share on production or trade. If a company were to violate this act, the people who oversaw the violation could face jail time and fines. In principle, this was a good act to be passed and a good principle to present to Congress, but despite its success, it is still flawed in its reasoning and phrasing.
Many companies found that the wording of the Act and the lack of definitions allowed for some loopholes to be exploited, and that is what ended up bringing the Act down. In 1895 the Act was dismantled briefly in the case United States v. E. C. Knight Company, as it was determined that a company's control on manufacturing did not constitute a monopoly on trade. The Act has had some success, such as in the case State of Minnesota v. Northern Securities Company when the company was dissolved when it was found that they did have a monopoly on state trade. The Act has been used several times since then, with a notable accusation in 1999 against Microsoft when it was discovered that they were attempting to create a monopoly on internet browsing software, but a court ordered breakup was overturned by an appeals court two years later.
The Sherman Antitrust Act has been successful in its regulation on large companies while allowing smaller companies to have a presence in their markets. Though the regulations of the Act are constraining for large companies to do trade overseas and can hinder the progression of the companies to be a presence in the market, it does ensure that the consumers stay in a free market without any prejudice, favoritism, and predatory pricing in trade.
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