Certification in Supplier Diversity Practice Exam

Which act was passed in 1890 to prohibit restrictive business practices that limit competition?

1. Clayton Act

2. Sherman Antitrust Act

3. Federal Trade Commission Act

4. Robinson-Patman Act

The correct answer is: Sherman Antitrust Act

The Sherman Antitrust Act, passed in 1890, was the first federal legislation aimed specifically at curbing anticompetitive practices and monopolistic behavior in the United States. Its primary purpose is to promote fair competition and to limit the formation of monopolies that could harm consumers and inhibit market competition. By prohibiting agreements among businesses that restrain trade or commerce and outlawing monopolistic practices, this act laid the foundation for antitrust law in the U.S. The act was a response to growing concerns about the power of large corporations and the negative impact they had on markets and consumers. Its importance cannot be overstated, as it marked a significant step toward ensuring a competitive marketplace, helping to protect small businesses and consumers alike from unfair business practices. Understanding the Sherman Antitrust Act is crucial for comprehending the evolution of antitrust laws and the ongoing efforts to promote supplier diversity and ethical business practices today.