Which law established a modern antitrust framework and was later strengthened by the Clayton Act?

• A. Interstate Commerce Act
• B. Sherman Antitrust Act
• C. Clayton Antitrust Act
• D. Federal Trade Commission Act

Answer: (C)

The question taps into how the United States built a workable antitrust system in the Progressive Era. The foundation of a modern antitrust framework was laid by the Sherman Antitrust Act of 1890, which made any agreement or combination that restrained trade or attempts to monopolize illegal. It set broad prohibitions and gave the federal government a tool to challenge trusts and monopolies, reflecting a new national stance against concentrated economic power.

But the Sherman Act alone left gaps and ambiguities, especially around specific business practices. That’s where the Clayton Antitrust Act of 1914 comes in: it tightened and clarified enforcement by targeting particular activities that could harm competition—things like price discrimination that isn’t just illegal per se, exclusive dealing, tying arrangements, mergers and acquisitions that would substantially lessen competition, and interlocking directorates. It also expanded remedies by allowing private lawsuits with damages (including treble damages) and provided clearer standards for enforcement, strengthening the overall regime.

So, while the later act refined and reinforced the framework, the initial move to establish a modern antitrust system was the Sherman Antitrust Act, with the Clayton Act acting as the important strengthening layer.