Certification in Supplier Diversity Practice Exam

Which law is considered a response to limitations in the Sherman Antitrust Act and was passed in 1914?

1. Clayton Act

2. Robinson-Patman Act

3. Lanham Act

4. Consumer Product Safety Act

The correct answer is: Clayton Act

The Clayton Act, passed in 1914, serves as a crucial response to the limitations found in the Sherman Antitrust Act. While the Sherman Act laid the groundwork for antitrust legislation by prohibiting monopolistic practices and conspiracies that restrain trade, it did not address certain specific business practices that could unfairly limit competition or create monopolies. The Clayton Act filled these gaps by addressing practices such as price discrimination, exclusive dealings, and mergers or acquisitions that may substantially lessen competition. By prohibiting specific actions that were not clearly defined in the Sherman Act, the Clayton Act enhances regulatory clarity and enforcement capabilities. For example, it directly addresses issues related to anti-competitive mergers, allowing the government to prevent mergers that would significantly lessen competition or create a monopoly. This proactive approach to antitrust regulation enables a more comprehensive understanding and response to emerging business practices that may harm competition and consumers. Therefore, the Clayton Act is recognized as a significant legal framework that builds upon and expands the objectives of the Sherman Antitrust Act, strengthening the protections against anti-competitive behaviors in the marketplace.