Antitrust Exemptions One of the First National Essay

Antitrust Exemptions

One of the first national laws against trusts and monopolies was the Sherman Antitrust Act of 1886, which applies to all businesses engaged in interstate or international commerce. Federal law and the courts have defined commerce very broadly, as the "giving of essentially anything in return for barter or money" unless a specific exemption is granted (ABA, p2007, p. 7). Up to the 1970s and 1980s, many industries had such exemptions, including shipping, trucking, airlines, and telephones, on the grounds that excessive competition was destructive and destabilizing to the economy or that foreign cartels had an unfair advantage over American industries. According to the Clayton Act and Federal Trade Commission Act of 1914, and the National Labor Relations Act of 1935, labor unions are specifically exempt from prosecution on antitrust grounds. Moreover, the Supreme Court has granted them non-statutory exemptions in the Jewel Tea and Pennington cases of 1965. Unions cannot be prosecuted on antitrust grounds when negotiating with employers about wages, hours, benefits and working conditions, although they are not permitted to "pursue the anti-competition interests of the employer group" (Wise and Meyer, 1997, p. 65). On the whole, non-statutory labor exemptions have led to "complex legal issues that courts have wrestled with for decades with little success," especially in professional sports (Wise and Meyer, p. 63).

Professional sports associations used the antitrust exemption for decades to keep on monopoly on their players and prevent rival organizations from forming. According to the Rozelle Rule in professional football, for example, even a team that signed a free agent had to pay cash compensation or agree to trade other players as replacements (Wong, 2010, p. 491). In the Mackey decision of 1976, the 8th Circuit Court ruled on the lawsuit by free agents that led to the abolition of the Rozelle Rule. Professional baseball had a complete exemption from antitrust laws dating back to a 1922 Supreme Court decision, on the…