Standard Oil Co. of New Jersey v. United States
| Standard Oil Co. of New Jersey v. United States | |
|---|---|
|
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| Argued March 14–16, 1910 Reargued January 12–17, 1911 Decided May 15, 1911 |
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| Full case name | The Standard Oil Company of New Jersey, et al. v. The United States |
| Citations | 221 U.S. 1 (more)
31 S. Ct. 502; 55 L. Ed. 619; 1911 U.S. LEXIS 1725
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| Prior history | Appeal from the Circuit Court of the United States for the Eastern District of Missouri |
| Holding | |
| The Standard Oil Company conspired to restrain the trade and commerce in petroleum, and to monopolize the commerce in petroleum, in violation of the Sherman Act, and was split into many smaller companies. Several individuals, including John D. Rockefeller, were fined. | |
| Court membership | |
| Case opinions | |
| Majority | White, joined by McKenna, Holmes, Day, Lurton, Hughes, Van Devanter, Lamar |
| Concur/dissent | Harlan |
| Laws applied | |
| Sherman Anti-Trust Act | |
Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911), was a case in which the Supreme Court of the United States found Standard Oil Co. of New Jersey guilty of monopolizing the petroleum industry through a series of abusive and anticompetitive actions. The Court's remedy was to divide Standard Oil into several geographically separate and eventually competing firms.
By the 1880s, Standard Oil was using its large market share of refining capacity to begin integrating backward into oil exploration and crude oil distribution and forward into retail distribution of its refined products to stores and, eventually, service stations throughout the United States. Standard Oil allegedly used its size and clout to undercut competitors in a number of ways that were considered "anti-competitive," including underpricing and threats to suppliers and distributors who did business with Standard's competitors.
The government sought to prosecute Standard Oil under the Sherman Antitrust Act. The main issue before the Court was whether it was within the power of the Congress to prevent one company from acquiring numerous others through means that might have been considered legal in common law, but still posed a significant constraint on competition by mere virtue of their size and market power, as implied by the Antitrust Act.
Over a period of decades, the Standard Oil Company of New Jersey had bought up virtually all of the oil refining companies in the United States. Initially, the growth of Standard Oil was driven by superior refining technology and consistency in the kerosene products (i.e., product standardization) that were the main use of oil in the early decades of the company's existence. The management of Standard Oil then reinvested their profits in the acquisition of most of the refining capacity in the Cleveland area, then a center of oil refining, until Standard Oil controlled the refining capacity of that key production market.
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