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Law School Case Brief

United States v. United States Steel Corp. - 251 U.S. 417, 40 S. Ct. 293 (1920)

Rule:

Federal antitrust law does not make mere size an offence or the existence of unexerted power an offence. It requires overt acts and trusts to its prohibition of them and its power to repress or punish them. It does not compel competition nor require all that is possible.

Facts:

Petitioner United States government brought antitrust suit against respondent United States Steel Corporation contending that combinations were formed in various branches of its iron and steel trade, not as an incident of normal growth, but with the purpose and effect of unduly restricting competition in violation of the Anti-Trust Act of July 2, 1890. The District Court for the District of New Jersey ruled in favor of the Corporation.

Issue:

Does the mere formation of “super” corporation combining numerous individual producers of steel and iron violate the anti-trust law?

Answer:

No.

Conclusion:

The Court held that since the formation of the "super" corporation, which brought together numerous individual producers of steel and iron, no act of aggression against its competitors was indicated, and no violation of law could be established except the very existence of the corporate entity. The Court noted that it was difficult to see how there could have been restraint of trade when there was no restraint of competitors in the trade nor complaints by customers. The Court noted that the law required overt acts and trusts to the law's prohibition of them and its power to repress or punish them.

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