antitrust law · claim

Elements of Sherman Act

Quick Answer

What are the elements of Sherman Act?

The Sherman Act of 1890 is a foundational statute in United States antitrust law that makes illegal certain business activities that reduce competition in the marketplace. It aims to prevent monopolistic practices and to maintain fair competition among businesses.

Required Elements

1. Anticompetitive Behavior

The alleged conduct must demonstrate an unreasonable restraint of trade or commerce among the several states or with foreign nations.

What to prove: It must be shown that the conduct in question has the effect of suppressing competition or creating a monopoly.

2. Market Power or Monopoly Power

A party must possess significant market power or possess a monopoly in order to be found in violation of the Sherman Act.

What to prove: It is necessary to establish that the defendant has the ability to control prices or exclude competition in a relevant market.

3. Effect on Interstate Commerce

The conduct must have an effect on interstate commerce or foreign commerce.

What to prove: Proof that the activities in question have a tangible impact on interstate trade or commerce is required.

Burden of Proof

The burden of proof lies with the plaintiff who must demonstrate the violation by a preponderance of the evidence.

Available Defenses
  • Pro-competitive justification
  • Plaintiff lacks standing
  • De minimis effects on competition
Common Fact Patterns
  • A merger between two competing companies that creates a dominant player in the market.
  • An exclusive dealing agreement that significantly restricts competitors from entering a market.
Exam Tip

Keep in mind the distinction between per se violations and rule of reason analyses in your answers. Understand how to apply the elements to hypothetical situations presented in exam questions.

Key Cases
  • United States v. E.C. Knight Co. (1895)
  • Standard Oil Co. of New Jersey v. United States (1911)
  • United States v. Microsoft Corp. (2001)

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