One of my favorite ICEL meetings each year is Test Your Credit Knowledge. This is partly because I really love games but also because it is a great chance to review things that we have learned.

I have noticed over the years that there are some areas that we all seem to struggle with. One of these areas is Antitrust Acts. Although I remember bits and pieces of each, I can rarely remember which act specifically addresses certain topics, so I decided to give a quick review of one of these acts.

I chose the Sherman Act since it’s the first federal antitrust act, protecting competition and free trade. The act was created in response to business practices taking place at the time which were resulting in a suppression of competition.

Some of these practices included:

• Price-fixing: where similar businesses worked together to create a pricing structure in order to keep prices artificially high.
• Monopolies: a situation in which a single company had control over the supply of a product or service.
• Bid Rigging: when an agreement is made between competitors as to who will be awarded a bid rather than have it awarded according to merit.
• Market Allocation: When competing companies agree to divide customers or specific markets between themselves.

Individuals or Companies who violate the Sherman Act can face some pretty severe penalties. Since this is considered criminal law, offenders can receive prison time for violations. There are also substantial fines that can be imposed, up to $1 million for an individual and $100 million for corporations and in some extreme cases even more.

In later years it was decided the Sherman Act had not clearly enough identified specific practices and may have left too much up to individual interpretation. In 1914 the Clayton Antitrust Act was passed to address this… But that’s a story for another day.