The Clayton Antitrust Act (15 U.S.C. § 12) was adopted in 1914, adding to existing federal antitrust law in the United States. The Clayton Act builds on the Sherman Antitrust Act by prohibiting mergers and acquisitions determined to be harmful to competition.
Under the Clayton Act, private parties (consumers and competitors) are allowed to bring an antitrust lawsuit against companies who have violated the Act and engaged in unlawful anticompetitive activities.
Prohibited Actions under the Clayton Act
The Clayton Act expands on the Sherman Act by prohibiting activities likely to lessen competition. The Act attempts to stop the formation of unlawful monopolies by requiring companies to notify federal agencies of impending mergers and acquisitions.
The Clayton Act also prohibits anticompetitive conduct which may take place through:
- Exclusive Dealings: requiring a buyer or seller to do buy or sell all or most of a certain product from a single supplier such that competitors are unable to compete in the market.
- Price Discrimination: selling similar goods to buyers at different prices.
- Tying & Bundling: selling a product or service on the condition that the buyer agrees to also buy a different product or service.
Enforcement of the Clayton Act
The Clayton Act allows private parties who were harmed by companies violating the Act to pursue litigation for treble damages, plus court costs and attorneys’ fees. The U.S. Department of Justice Antitrust Division and the Federal Trade Commission also enforce the Clayton Act.