Congress in 1950 to strengthen antitrust legislation associated with the clayton antitrust act of 1914. Some companies did this to such an extent that it reduced competition, which had the potential to effectively sideline the clayton act. Cellerkefauver act is a united states federal law passed in 1950 that reformed and strengthened the clayton antitrust act of 1914, which had amended the sherman antitrust act of 1890. Sherman antitrust act of 1890 promised to rein in the trusts through federal prosecutions. Act of 1936, the cellerkefauver act of 1950, and other acts, have increased the protection the law affords our.
The celler kefauver act of 1950 was just such a shock, in that it opened horizontal and vertical mergers to federal scrutiny and encouraged firms to spend excess capital on other kinds of acquisitions. A decade of administration of the cellerkefauver antimerger act. The first cases under the amended section 7 reached the supreme court during the peak of the warren court era of structural antitrust jurisprudence in the early 1960s. Mueller 4 separately identified a shift in the composition of merger activity following 1950. Cellerkefauver act antitrust legislation enacted in 1950 which prohibits companies from merging with vertical partners, such as suppliers and distributors, if it can be demonstrated that the merger would impede competition. The act empowers the government to prevent vertical mergers and conglomerate mergers which could limit competition. Cellerkefauver antimerger act law and legal definition. Passage of the cellerkefauver antimerger act in 1950 marked the beginning of a new antitrust experience across the whole u. Celler kefauver act of 1950 the celler kefauver act amended. Act of 1950 amended section 7 of the clayton act and redirected mergers toward the conglomerate variety scherer 1980, pp. The priceconcentration hypothesis, jts, version 032406 2. The cellerkefauver act targets mergers where companies purchase suppliers, and. Using a crosssection of 247 fourdigit sic industries, we present an econometric analysis testing the hypothesis that innovation rates in 1982 were significantly influenced by market structure, and that these influences had disperate. The celler kefauver act closed this loophole, giving the government the power to stop vertical mergers and asset acquisitions regarded as reducing competition.
Modern merger law in the united states began with the passage of the celler kefauver act in 1950, which amended section 7 of the clayton act to substantially broaden its reach. In assessing the celler kef auver act and its subsequent enforcement, it was discovered that the major impact was through the deterrent effect. The celler kefauver act and the deterrent effect springerlink. Congressman celler, in testifying for the celler kefauver bill that was the 1950 amendment to 7 of the clayton act, said. Clayton antitrust act summary, history, significance. Breaking down cellerkefauver act the former antitrust legislation. Celler kefauver antimerger act, also known as an act to amend an act entitled an act to supplement existing laws against unlawful restraints and monopolies, and for other purposes, approved october 15, 1914 38 stat. Us antitrust law and policy in historical perspective harvard. Passage of the cellerkefauver antimerger act in 1950.
The act amended previous anttrust legislation clayton act which prohibited certain horizontal mergers. The merger guidelines and the integration of efficiencies. Cellerkefauver act is a united states federal law passed in 1950 that reformed and strengthened the clayton antitrust act of 1914, which had amended the. The three founding pieces of antitrust legislation were the sherman antitrust act 1890, which laid the foundation of antitrust legislation. And sometimes they are meant to garner political support for a law by giving it a catchy name as with the usa patriot act or the take pride in america act or by invoking public outrage or sympathy as with any number of laws named for victims of crimes. A 1950 refinement of previous antitrust legislation dealing primarily with mergers. The united states congress passed the cellerkefauver act in 1950 with the goal of strengthening the provisions of the clayton antitrust act of 1914. Clayton act 100th anniversary symposium federal trade. The object of the act is to restrict anticompetitive mergers resulting in acquisition of assets. The purpose of this paper is to identify the major determinants of innovation and to examine whether they affect small firms differently than large firms. This act is an amendment to the clayton antitrust act of 1914.
Firms could evade section 7, however, by instead acquiring the physical assets plant and equipment of competing firms. Congress in 1950 that was intended to strengthen previously enacted antitrust legislation known as. Pdf antitrust and the competitive structure of the u. Pdf the evolution ofantitrust law in usa researchgate. The cellerkefauver act was passed in 1950 to create additional restrictions in addition to the clayton and sherman antitrust act. Yet, the application of the act required government to forge industry specific standards of competitive structure. The key pieces of antitrust legislation in the united statesthe sherman antitrust act of 1890. Act in september 1978 signi cantly relaxed those constraints. Section 7 of the clayton act its application to the conglomerate merger in the 180 year span of industrial development since the advent of the steam driven mill, perhaps the single unifying element permeating american commerce has been its continued and accelerating growth.
Celler kefauver act of 1950 the celler kefauver act amended the clayton act, section 7, which prohibits a firm from merging with a competing firm and thereby lessening competition by acquiring its stock. Cellerkefauver antimerger act an american antitrust law passed in 1950 that closed a major loophole in the clayton act. Passage of the celler kefauver antimerger act in 1950. The celler kafauver act broadened the applicability of antimerger provisions in the clayton antitrust act.
Learn vocabulary, terms, and more with flashcards, games, and other study tools. Cellerkefauver antimerger act financial definition of celler. The priceconcentration hypothesis, jts, version 032406 3 cellerkefauver act of 1950, in several decisions in the 1960s and 1970s. May 18, 2018 the cellerkefauver act was passed in 1950 to create additional restrictions in addition to the clayton and sherman antitrust act. Cellerkefauver act explained the business professor. Economics meets sociology in strategic management advances in. While the clayton act prohibited stock purchase mergers. Home collections database of federal statute names cellerkefauver act see antimerger act cellerkefauver act see antimerger act popular name statutized. The priceconcentration hypothesis, jts, version 032406 3 celler kefauver act of 1950, in several decisions in the 1960s and 1970s. Two sections of the clayton act were later amended by the robinsonpatman act 1936 and the celler kefauver act 1950 to fortify its provisions. The clayton antitrust act was enacted in 1914 to prevent anticompetitive acts. The united states congress passed the celler kefauver act in 1950 with the goal of strengthening the provisions of the clayton antitrust act of 1914. While the clayton act prohibited mergers that reduced. Learn about the history and impact of the cellerkefauver act.
Specifically, the act was enacted to seal a loophole in the clayton act regarding certain forms of mergers and acquisitions. Other notable legislation is the federal trade commission act of 1914 established the federal trade commission 1, the robinsonpatman act of 1936 provided protection against price discrimination to small retailers, and the celler kefauver act of 1950 closed the loopholes regarding asset acquisition by potential competitors to limit. Cellerkefauver act is a united states federal law passed in 1950 that reformed and strengthened the clayton antitrust act of 1914, which had amended the sherman antitrust act of 1890 the cellerkefauver act was passed to close a loophole regarding asset acquisitions and acquisitions involving firms that were not direct competitors. In recent years, however, conglomerate merger enforcement has been largely dormant. History books, newspapers, and other sources use the popular name to refer to these laws. The cellerkefauver act was passed to close a loophole regarding asset acquisitions 1 and acquisitions involving firms that were not direct competitors. Specifically, the act broadened the applicability of antimerger provisions in the clayton antitrust act. Other notable legislations are the federal trade commission act of 1914 established the federal trade commission 1, the robinsonpatman act of 1936 provided protection against price discrimination to small retailers, and the celler kefauver act of 1950 closed the loopholes regarding asset acquisition by. A requirement of certainty and actuality of injury to competition is incompatible with any effort to supplement the sherman act by reaching incipient restraints.
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