Present at Antitrust's Creation: Consumer Welfare in the Sherman Act's State Statutory Forerunners

Abstract

For the last four decades, federal courts have construed the Sherman Act as a consumer welfare statute. But considerable disagreement persists within the legal academy regarding the true legislative aims of American antitrust law. This Note argues that interpreters of the Sherman Act ought to look more closely at an understudied branch of antitrust — state antitrust statutes enacted contemporaneously with the Sherman Act — to better understand the roots of federal antitrust law. The Sherman Act’s legislative history indicates that Congress intended to prohibit the same combinations in restraint of trade that were already prohibited by state statutory and common law. The plain language of the Sherman Act’s state predecessors shows that most were designed to promote what we now call consumer welfare. These statutes prohibited only those business combinations that harmed consumers by artificially constraining the supply of consumer goods. Read in this context, the Sherman Act is properly understood as the federal component of a national program on behalf of consumer welfare.

Keywords: Sherman Act, antitrust, statutory interpretation, in pari materia, consumer welfare, total welfare, consumer surplus