Question

7. Discuss both the Standard Oil and ALCOA anti-trust cases in terms of judging competitiveness by Performance of Structure?

Answer 1

The Supreme Court’s one911 call in normal Oil gave U.S. embryonic versions of 2 foundational standards of liability below the Sherman Act: the rule of reason below Section 1 and the monopoly power/exclusionary conduct test under Section 2. But a case filed later in 1911, u. s. v. United States Steel Corporation, formed the understanding of normal Oil’s standards of liability for many years. U.S. Steel, eventually set by the Supreme Court in 1920, upheld the 1901 merger that created U.S. Steel. The majority found that the efforts of the Corporation and its rivals to manage costs within the noted urban center dinners had profaned Section one of the Sherman Act once they occurred, but paradoxically insulated U.S. Steel from liability under Section 2. U.S. Steel was formed to monopolize the industry, but failed; it demonstrated its impotence by fixing prices with rivals instead of crushing them, as Standard Oil had done.

U.S. Steel’s interpretation and application of normal Oil basically over governmental social control of section a pair of till Alcoa. Economic scholars suggest that the case ratified “the most socially damaging of all mergers in U.S. history” and caused lasting damage to the yankee economy by creating the crucial industry less competitive. Equally vital, I argue during this essay, it harmed antitrust doctrine. In cases like Alcoa, it vie a job in confusing within the law of monopolisation below Section a pair of of the Sherman Act. Moreover, by rendering Section one of the Sherman ineffective against noncompetitive mergers, it contributed to the passage of Cellar-Kefauver Act’s amendment of Section 7 of the Clayton Act in 1950 and, indirectly, to the early misguided interpretations of that provision in cases like Brown Shoe and Von’s. In this essay, I will describe errors of U.S. Steel, the mistaken responses to those errors in post-New Deal just, and role of competing ideologies in both. In a final Part, I argue that modern reforms should assure that both U.S. Steel’s errors and therefore the excesses of the post-New Deal just won't recur.