The Application of the Sherman Act to "Integrated" and "Loose" Industrial Combinations

Abstract

During the latter part of the nineteenth century, the doctrine of laissez faire was woven into the fabric of our constitutional law via the due process clause. Condemnation of restraints and monopolies by the Sherman Act gave expression to this doctrine. Today these off-shoots of laissez-faire doctrine, as embodied both in constitutional law and in the Sherman Act, are under heavy fire. As to the Sherman Act, the efficacy of competition as a regulator of prices is questioned; the evil of too much as well as too little competition is stressed-witness many of the NRA codes; the failure of the antitrust laws to prevent concentration of business in the hands of a few is widely proclaimed. There is undoubted force in much of this criticism; the present antitrust laws certainly need to be supplemented by additional legislation. These questions, however, lie outside the present subject, which is rather an attempt to analyze court decisions interpreting the antitrust laws, dealing with the decisions from the standpoint of the practicing lawyer seeking some general familiarity with them. After all, they are the tools with which he must work, and sometimes the obstacles he must overcome, in carrying out the basic policy of Congress laid down in the Sherman Act and partially supplemented in the Clayton Act. The decisions construing the Sherman Act may be roughly classified under two headings-those involving integrated combinations and those involving loose combinations. By integrated combinations is meant those where the restraint of monopolization of commerce flows from the possession or acquisition of property rights. This group includes all cases where two or more independent concerns are brought under common ownership or control by an acquisition of stock or assets; all mergers or consolidations; and all cases where a corporation and its subsidiaries and affiliates possess power to exercise monopolistic control over prices or otherwise to restrain trade and commerce, irrespective of any recent direct absorption of competitors. Loose combinations embrace all instances where concerns not linked together by