From Volume 85, Number 3 (March 2012)
The Supreme Court’s 1911 decision in Standard Oil gave us embryonic versions of two foundational standards of liability under the Sherman Act: the rule of reason under Section 1 and the monopoly power / exclusionary conduct test under Section 2. But a case filed later in 1911, United States v. U.S. Steel Corp., shaped the understanding of Standard Oil’s standards of liability for decades. U.S. Steel, eventually decided by the Supreme Court in 1920, upheld the spectacular 1901 merger that created the Corporation, as U.S. Steel was known. The majority found that the efforts of the Corporation and its rivals to control prices in the famous Gary dinners had violated Section 1 when they occurred, but paradoxically insulated U.S. Steel from liability under Section 2. U.S. Steel was formed to monopolize the industry but failed; it demonstrated its impotence by fixing prices with rivals instead of crushing them, as Standard Oil had done.