Sherman Act and Clayton Act Guide for Small Business
Sherman Act and Clayton Act explained for small business owners and professionals: antitrust slides, who is covered, penalties and 2026 merger filing lines.
Last reviewed October 29, 2026 · General information, not legal advice
General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.
The Sherman Act and the Clayton Act are the main federal antitrust laws. They bar competing businesses from agreeing on prices, splitting up customers or shutting out rivals, and they set rules for mergers. The Justice Department's Antitrust Division and the Federal Trade Commission (FTC, which also enforces the FTC Act) bring cases, and customers can sue too. This page is for owners of small businesses, freelancers and professionals who deal with competitors, workers or a possible sale. Page 3 has a short self-check we call the Four-Door Rival Walk.
Slide show: The Sherman and Clayton Acts in seven slides
What the laws do
The Sherman Act (1890) bans agreements between competitors that restrain trade. The Clayton Act adds merger rules, a board-overlap ban and private damages claims.
Who they cover
Any business in trade among the states or with other countries. There is no minimum size and no employee count.
The core rule
Price fixing, bid rigging and market splitting between competitors are treated as always illegal. Arguing the prices were reasonable does not help.
The big number
A company can be fined up to $100 million; a person faces up to $1 million, 10 years in prison, or both. A court can instead set a fine up to twice the gain or loss if that is higher.
The filing line
In 2026 a deal worth $133.9 million or less is not reportable under the Hart-Scott-Rodino (HSR) Act. Reportable deals wait 30 days before closing (15 for a cash tender offer).
The penalties
Customers who sue can win three times their damages if they file within 4 years. Skipping an HSR filing costs up to $53,088 a day (2025 amount).
A common safeguard
Set your own prices and terms, and keep rival talks away from prices, bids and pay. In association data programs, the FTC says past, combined figures run by a third party raise fewer concerns.
Who is covered
Rule
Who it reaches
Size line or exemption
Sherman Act sections 1 and 2
Any business in trade among the states or with other countries
No size floor
Clayton Act section 7 (mergers)
Stock or asset purchases that may reduce competition
Any deal size, filed or not
Clayton Act section 7A (HSR filing)
Deals above the size tests
Over $133.9 million (2026); party size also counts up to $535.5 million
Clayton Act section 8 (shared boards)
One person serving as director or officer of two competing corporations
Each above $54,402,000 in capital, surplus and undivided profits (2026), with small-sales safe harbors
Illinois Antitrust Act (740 ILCS 10)
Illinois parallel law; the attorney general and injured parties can sue
Courts use federal rulings as a guide where the wording is similar
Section 8 says "corporations," and whether it reaches LLCs is not settled.
How it touches your taxes and payroll
Fines paid to a government are not deductible under Internal Revenue Code section 162(f); see our IRC guide and business expense deductions. If a taxpayer is convicted of an antitrust crime or pleads guilty or no contest, section 162(g) disallows two-thirds of a treble-damages payment. Pay scales set jointly with competitors can become evidence in a wage-fixing case, so payroll records matter.
