by Pablo Salinas

Today, Secretariat marks the 135th anniversary of the Sherman Antitrust Act, enacted by the 51^st U.S. Congress and signed into law by President Benjamin Harrison on July 2, 1890. The Act was the first comprehensive federal legislation to promote competition, criminalize monopolistic behavior, and empower courts to uphold economic efficiency as a public good. 

The Sherman Act remains actively enforced and has never been repealed or amended. It established two key prohibitions that are central to antitrust enforcement: 

• Section 1 bans any contract, combination, or conspiracy in restraint of trade 
• Section 2 makes it a felony to monopolize, or attempt to monopolize, any market 

With over a century of enforcement history and growing relevance in today’s digital and data-driven economy, the Sherman Act remains the cornerstone of American competition law. 

From Railroads to Algorithms 

“An unamended cornerstone of antitrust, the Sherman Act endures through its focus on economic efficiency, bridging eras of threatened competition despite falling prices and rising output.”
— Pablo Salinas, PhD, Economist 

The Act passed with overwhelming bipartisan support: 242–0 in the House and 52–1 in the Senate. The near-unanimous decision took place against a backdrop of rising output and falling prices, much like today’s digital economy. Despite dramatic improvements in freight logistics and a ~40% decline in real rail rates between 1880 and 1900, lawmakers feared the long-term harm posed by monopolistic trusts like Standard Oil, which vertically integrated oil refining with rail transport. These trusts threatened to: 

• Foreclose market access for rivals 
• Discriminate in favor of their own products 
• Inflate input costs 
• Lock in suppliers through exclusive contracts 

Today’s digital platforms exhibit similar traits. Giants like Google, Amazon, Meta, and Apple operate at massive scale, benefit from network effects, and provide low-cost (often free) services. Yet they increasingly face antitrust scrutiny—not because they raise prices, but because they control data, infrastructure, and market access in ways that may stifle competition. 

Google may prioritize its own services in search. Apple imposes a 30% fee on in-app purchases. Meta has acquired potential rivals like Instagram and WhatsApp. Amazon observes both buyers and sellers on its platform, raising concerns about self-preferencing. These firms also control proprietary datasets that are inaccessible to competitors, creating what regulators describe as “data moats.” In the words of industry leaders and public officials, “data is the new oil.” 

A Modern Enforcement Framework 

The Sherman Act’s enforcement is now supplemented by: 

• The Clayton Act of 1914, which added civil enforcement tools to address mergers, tying, price discrimination, and interlocking directorates before they harm competition 
• The Federal Trade Commission Act of 1914, which established the FTC and outlawed unfair methods of competition 

Unlike the Sherman Act, which includes criminal penalties, the Clayton Act is purely civil and allows regulators to preempt anticompetitive behavior, especially in mergers and vertical integration, without needing to prove actual harm. 

Economic Theory and the Digital Era 

Modern markets differ fundamentally from the industrial sectors of the 19th century. Digital products are often non-rival, marginal costs approach zero, and market dominance can persist even as prices fall. This challenges traditional antitrust paradigms that focus on price and output and shifts attention to data control, entry barriers, and platform entrenchment. 

Economics of Antitrust at Secretariat

“Without rigorous economic insight, antitrust enforcement risks becoming reactive guesswork rather than a disciplined defense of competitive markets.”
— Jéssica Dutra, PhD, Director 

Understanding Sherman Act enforcement today requires fluency in economic theory, technological structure, and platform design. 

At Secretariat, we apply advanced economic analysis to help clients navigate Sherman Act enforcement across a range of high-value industries: 

Health Care 

We advise on the antitrust risks of hospital consolidation, exclusive contracts with suppliers, and pricing practices among insurers, healthcare group purchasing organizations, and pharmacy benefit managers. Recent scrutiny has focused on conduct under Section 1 involving collusion or exclusionary contracting that may restrict competition and raise costs. 

“The Sherman Act safeguards competition as the cornerstone of a free market, a principle especially vital in healthcare, where anticompetitive conduct can raise prices and restrict patient access. In a sector where lives and livelihoods are at stake, the Sherman Act ensures that innovation and affordability aren’t casualties of consolidation.”

— Jason Albert, PhD, Director 

Auctions 

Bid rigging remains one of the clearest Sherman Act violations. We help clients detect, prevent, and litigate collusion in contexts including construction, spectrum auctions, advertising, foreclosure sales, and government procurement. 

“The Sherman Act prohibits collusive practices that undermine competitive bidding in auctions, such as bid rigging or market allocation, which distort price discovery and harm allocative efficiency. Robust auction competition is essential to preserving the Act’s core goal of protecting the competitive process.”

— Panos Dimitrellos, PhD, Associate Director 

“Historically, as much as 50 percent of the collusion cases brought by the US Department of Justice have involved alleged bid-rigging in auction markets. This illustrates the important role the Sherman Act plays in promoting competitive auction markets and the importance of diligently policing bidding practices in those markets.”

— Allan Ingraham, PhD, Managing Director 

Labor Markets 

The Sherman Act is increasingly invoked to address wage suppression, non-poach agreements, and monopsony power. From fast food franchises to tech giants, antitrust enforcers are challenging practices that restrain worker mobility and suppress wages. 

“The potential for anticompetitive practices by employers in labor markets has led to a renewed interest in using the Sherman Act to ensure fair competition for workers and prevent the abuse of employer monopsony power through practices such as agreements to fix wages, no-poach and non-compete agreements, or mergers and acquisitions that reduce competition in labor markets.”
— Stuart Gurrea, PhD, Managing Director