ABSTRACT
In response to the euphoria for combinations (trusts) and the visible effect of the trusts on the lives of Americans, the US Congress passed the Sherman Antitrust Act (1890). However, the concept of combinations had taken a strong hold on American society and some states were sympathetic to the practice of combinations. For example, New Jersey passed legislation that made it possible to circumvent the intent of the Sherman Act via the creation of holding companies that could hold shares in subsidiary companies. Analogously, Delaware created an amicable business environment to incorporate disgruntled companies. By 1930, Delaware became the host of more than a third of the industrial corporations (Greenspan & Wooldridge, 2018, p. 143).
The effects of antitrust laws and their limitations are presented in this chapter. Antitrust laws are intended to prevent unlawful mergers (combinations or monopolies) in order to foster competition that will spur innovation, generate fair prices, and enhance consumer welfare.
