Which section of the Sherman Act deals with restraints of trade?

• A. Section 2
• B. None
• C. Both sections 1 and 2
• D. Section 1

Answer: (D)

Restraints of trade occur when two or more businesses agree to limit competition, such as price fixing, market division, or group boycotts. Section 1 of the Sherman Act targets those arrangements, making contracts, combinations, or conspiracies in restraint of trade unlawful. Some restraints are illegal per se (illegal no matter what), while others are evaluated under the rule of reason to weigh anticompetitive harm against any procompetitive justifications. Section 2, by contrast, deals with monopolization and attempts to monopolize, not the general restraints created by agreements between competitors. So the section that deals with restraints of trade is Section 1.