Clayton Act

An antitrust law passed in 1914 that prohibits a variety of pricing violations, such as discriminatory rebates, pricing or discounts that favor one group of customers over another. Section 7 of the Clayton Act prohibits mergers if the effect would be to substantially lessen competition or to create a monopoly. Within that section, the Hart-Scott-Rodino Act requires prior notification of mergers over $50 million to both the Federal Trade Commission (FTC) and the Justice Department, who are jointly charged with monitoring compliance. The $50 million will adjust beginning October 1, 2004 to take into account changes in the U.S. economy, based on gross national product from the previous year. Although the Clayton Act was passed in 1914, it has been updated and amended, including the Hart-Scott-Rodino Act, which was passed in 1976.