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Antitrust laws are legislation that has been established to prevent companies from engaging in practices that are considered unfair and reduce competition in the marketplace. The US first established such laws to prevent business trusts, or cartels.
Types of activities that antitrust laws are designed to combat are: bid rigging, creation of a monopoly, price fixing, tying, and vendor lock-in.
The primary antimonopoly law in the US is the Sherman Antitrust Act, which was passed in 1890 and outlawed any restraint of trade. The Clayton Antitrust Act of 1914 extended the US antitrust laws, making illegal: interlocking directorates, ownership in a competing corporation, and price-cutting below cost to eliminate a competitor.
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