Document Type

Article

Publication Title

University of Chicago Law Review

Abstract

The central theme of antitrust law is its decided preference for competition over monopoly in a wide range of product and service markets. The argument for this position does not rest on any simple or mechanical application of the general libertarian prohibition against force and fraud. Instead, ultimately it depends strongly on an explicitly utilitarian framework whose central tenet is that in the general case, social welfare is greater in competitive than monopoly industries. Yet beneath this general agreement lies much disagreement about just what sort of conduct should be caught by antitrust law. In Part I, I argue that the wisest course of action is to confine the operation of antitrust law to cartels and mergers that have the consequence of raising prices and restricting output. Even in this context, treble damages create serious risks of overdeterrence, but at least it is possible to tell a consistent story as to why antitrust law moves beyond the libertarian prohibitions against force and fraud. In contrast, the treatment of unilateral practices-predation, exclusive dealing, and tie-ins-are not grounded on a similar theory, and are thus subject to three key objections: their excessive reliance on "intent" evidence that is easily misconstrued; their inability to come up with a powerful explanation as to why practices that are regarded as efficient for ordinary firms are treated as illegal for dominant ones; and their inability to separate reliably pro- from anticompetitive practices. In Part II of this Essay, I examine in some greater detail the controversial decision in LePage's Inc v 3M (Minnesota Mining and Manufacturing Co) in order to show the deleterious consequences that flow from the aggressive condemnation of unilateral practices. The general conclusion is that antitrust law should abandon its attack on these unilateral practices altogether, or at least sharply circumscribe their use.

First Page

49

Volume

72

Publication Date

2005

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