Clayton Antitrust Act of 1915

Introduced by Alabama Democrat Henry De Lamar Clayton in the U.S. House of Representatives, The Clayton act specified
particular prohibited conduct, the three-level enforcement scheme, exemptions, and remedial measures.

The Sherman Antitrust Act of 1890 was the first Federal law outlawing practices considered harmful to consumers monopolies
and cartels). The Clayton Antitrust Act of 1915, 15 U.S.C. § 12–27, 29 U.S.C. § 52–53), was enacted in the United States
to add to the U.S.antitrust law regime.

Provisions

The Clayton Act prohibits:

price discrimination between different purchasers if such discrimination substantially lessens competition or tends to create a
monopoly in any line of commerce (Act Section 2, codified at 15 U.S.C. § 13);

sales on the condition that (A) the buyer or lessee not deal with the competitors of the seller or lessor ("exclusive dealings") or
(B) the buyer also purchase another different product ("tying") but only when these acts substantially lessen competition (Act
Section 3, codified at 15 U.S.C. § 14);

mergers and acquisitions where the effect may substantially lessen competition (Act Section 7, codified at 15 U.S.C. § 18);

any person from being a director of two or more competing corporations (Act Section 8; codified at 15 U.S.C. § 19).

Clayton-7 allows the FTC and DOJ to regulate all mergers, and gives the government discretion whether to approve a merger
or not. Today, the test used for whether a merger is approved is based on the Herfindahl-Hirschman Index (HHI") test for
market concentration.

Clayton-3 clarifies that both horizontal and vertical agreements are within the scope of federal antitrust law.

When exclusive dealings or tying arrangements are challenged under Clayton-3 (or Sherman-1), they are treated as "rule of
reason" cases. Under the rule of reason, the conduct is only illegal, and the plaintiff can only prevail, upon proving to the court
that the defendants are doing substantial economic harm.

It is a recognizable fact that exclusive dealings and tying arrangements are quite common, and potentially beneficial to
consumers, and the economy. Therefore, the Court has seen fit not to apply a per se rule to Clayton-3 conduct.

Exemptions
Clayton act confers safe harbor for union activities. Section 6 of the Act (codified at 15 U.S.C. § 17) exempts labor unions
and agricultural organizations. Therefore, boycotts, peaceful strikes, peaceful picketing, and collective bargaining are not
regulated by this statute. Injunctions could be used to settle labor disputes only when property damage was threatened.

Enforcement
Clayton act empowers private parties injured by violations of the Act to sue for treble damages under Section 4 and injunctive
relief under Section 16.
Clayton act is also enforced by the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice.