Which legislation is designed to promote competition by prohibiting restraints of trade?

The Sherman Antitrust Act is designed to promote competition by prohibiting restraints of trade. This landmark legislation, enacted in 1890, was the first federal act that aimed to curb concentrations of power that interfere with trade and commerce. It addresses and outlaws monopolistic practices, making it illegal to restrict trade or commerce through anticompetitive agreements or conspiring to establish monopolies.

The focus of the Sherman Act is to encourage a competitive marketplace, which benefits consumers through lower prices, higher quality goods, and innovation. It sets the foundation for antitrust laws in the United States, making it a pivotal piece of legislation in the realm of economic policy and fair competition.

In contrast, the other options relate to different aspects of trade regulation and securities. The Securities Exchange Act governs securities transactions to protect investors, while the Clayton Antitrust Act builds on the Sherman Act by addressing specific practices that could lead to anticompetitive behavior. The Federal Trade Commission Act established the Federal Trade Commission to protect consumers and maintain competition, but it operates in conjunction with, rather than as the primary law prohibiting restraints of trade.