Law Commons^™

Federalism, Free Competition, And Sherman Act Preemption Of State Restraints, Alan J. Meese

Faculty Publications

The Sherman Act establishes free competition as the rule governing interstate trade. Banning private restraints cannot ensure that competitive markets allocate the nation's resources. State laws can pose identical threats to free markets, posing an obstacle to achieving Congress's goal to protect free competition.

The Sherman Act would thus override anticompetitive state laws under ordinary preemption standards. Nonetheless, the Supreme Court rejected such preemption in Parker v. Brown, creating the "state action doctrine." Parker and its progeny hold that state-imposed restraints are immune from Sherman Act preemption, even if they impose significant harm on out-of-state consumers. Parker's progeny …

Alston And The Dejudicialization Of Antitrust, Richard D. Friedman

Articles

A curious feature of NCAA v. Alston is the shoe that didn’t drop, at least not immediately. “Put simply,” Justice Gorsuch wrote for a unanimous Court, “this suit involves admitted horizontal price fixing in a market where the defendants exercise monopoly control.” Given that this pronouncement occurred on page fourteen of the Court’s opinion, one might have expected that the opinion would end on, say, page fifteen, for if there has been one fixed point in American antitrust law it has been that horizontal price-fixing, especially but not only by those with monopoly power, is per se illegal. Instead, the …

Will The Supreme Court Recover Its Own Fumble? How Alston Can Repair The Damage Resulting From Ncaa's Sports League Exemption, Alan J. Meese

Faculty Publications

Horizontal restraints are unlawful per se unless a court can identify some redeeming virtue that such restraints may create. In National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma (“NCAA”), the Supreme Court rejected this standard, refusing to condemn horizontal restraints on price and output imposed by the NCAA without specifying any possible redeeming virtues. The Court emphasized that other restraints not before the Court were necessary to create and maintain athletic competition like that supervised by the NCAA. This exemption for sports leagues ensures that all restraints imposed by such entities merit Rule …

Antitrust's High-Tech Exceptionalism, Rebecca H. Allensworth

Vanderbilt Law School Faculty Publications

American competition policy has four big problems: Amazon, Apple, Facebook, and Google. These companies each reign over a sector of the digital marketplace, controlling both the consumer experience and the possibility of competitive entry. This Essay argues that the conventional account of how antitrust law allowed this consolidation of market power - that it failed to evolve to address the market realities of the technology sector-is incomplete. Not only did courts fail to adapt antitrust law from its smoke-stack roots, but they gave big tech special dispensation under traditional antitrust doctrine. Swayed by prevailing utopic views about digital markets in …

Requiem For A Lightweight: How Ncaa Continues To Distort Antitrust Doctrine, Alan J. Meese

Faculty Publications

The Supreme Court speaks rarely about the meaning of the Sherman Act. When the Court does speak, its pronouncements have particular resonance and staying power among jurists, scholars, and enforcers. NCAA v. Board of Regents of the University of Oklahoma was such a case. There the Court assessed agreements reducing the output and increasing the prices of televised college football games. After announcing that restraints imposed by sports leagues are exempt from per se condemnation, the Court went on to invalidate the challenged agreements under the rule of reason because they produced significant economic harm without offsetting benefits. In so …

Mere Common Ownership And The Antitrust Laws, Thomas A. Lambert

Faculty Publications

"Common ownership," also called "horizontal shareholding," refers to a stock investor's ownership of minority stakes in multiple competing firms. Recent empirical studies have purported to show that institutional investors' common ownership reduces competition among commonly owned competitors. "Mere common ownership" is horizontal shareholding that is not accompanied by any sort of illicit agreement, such as a hub-and-spoke conspiracy, or the holding of a control-conferring stake. This Article considers the legality of mere common ownership under the U.S. antitrust laws. Prominent antitrust scholars and the leading treatise have concluded that mere common ownership that has the incidental effect of lessening market …

Antitrust Regulation And The Federal-State Balance: Restoring The Original Design, Alan J. Meese

Faculty Publications

The U.S. Constitution divides authority over commerce between states and the national government. Passed in 1890, the Sherman Act (“the Act”) reflects this allocation of power, reaching only those harmful agreements that are “in restraint of... commerce among the several States.” This Article contends that the Supreme Court erred when it radically altered the balance between state and national power over trade restraints in 1948, abruptly abandoning decades of precedent recognizing exclusive state authority over most intrastate restraints. This revised construction of the Act contravened the statute’s apparent meaning, unduly expanded the reach of federal antitrust regulation, and undermined the …

Antitrust: What Counts As Consumer Welfare?, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust’s consumer welfare principle is accepted in some form by the entire Supreme Court and the majority of other writers. However, it means different things to different people. For example, some members of the Supreme Court can simultaneously acknowledge the antitrust consumer welfare principle even as they approve practices that result in immediate, obvious, and substantial consumer harm. At the same time, however, a properly defined consumer welfare principle is essential if antitrust is to achieve its statutory purpose, which is to pursue practices that injure competition. The wish to make antitrust a more general social justice statute is understandable: …

The Sherman Act Is A No-Fault Monopolization Statute: A Textualist Demonstration, Robert H. Lande, Richard O. Zerbe Jr.

All Faculty Scholarship

The drafters of the Sherman Act originally designed Section 2 to impose

sanctions on all monopolies and attempts to monopolize, regardless whether the

firm had engaged in anticompetitive conduct. This conclusion emerges from the

first ever textualist analysis of the language in the statute, a form of interpretation

originally performed only by Justice Scalia but now increasingly used by the

Supreme Court, including in its recent Bostock decision.

Following Scalia’s methodology, this Article analyzes contemporaneous

dictionaries, legal treatises, and cases and demonstrates that when the Sherman

Act was passed, the word “monopolize” simply meant that someone had acquired

a monopoly. …

Direct Evidence Of A Sherman Act Agreement, William H. Page

UF Law Faculty Publications

In cases that allege price fixing or other per se violations of Section 1 of the Sherman Act, courts usually begin their opinions by saying there is no direct evidence of agreement—evidence like a “recorded phone call” that is “explicit and requires no inferences to establish” that the necessary direct communications occurred. Only at that point do the courts turn to the sufficiency of the inferences of agreement from circumstantial evidence. Courts highlight the absence of direct evidence of agreement in this way because of its special role on motions to dismiss or for summary judgment, when courts do not …

Do Founders Control Startup Firms That Go Public?, Brian Broughman, Jesse M. Fried

Vanderbilt Law School Faculty Publications

American competition policy has four big problems: Amazon, Apple, Facebook, and Google. These companies each reign over a sector of the digital marketplace, controlling both the consumer experience and the possibility of competitive entry. This Essay argues that the conventional account of how antitrust law allowed this consolidation of market power - that it failed to evolve to address the market realities of the technology sector- is incomplete. Not only did courts fail to adapt antitrust law from its smoke-stack roots, but they gave big tech special dispensation under traditional antitrust doctrine. Swayed by prevailing utopic views about digital markets …

Antitrust & Corruption: Overruling Noerr, Tim Wu

Faculty Scholarship

We live in a time when concerns about influence over the American political process by powerful private interests have reached an apogee, both on the left and the right. Among the laws originally intended to fight excessive private influence over republican institutions were the antitrust laws, whose sponsors were concerned not just with monopoly, but also its influence over legislatures and politicians. While no one would claim that the antitrust laws were meant to be comprehensive anti-corruption laws, there can be little question that they were passed with concerns about the political influence of powerful firms and industry cartels.

Since …

Taking Antitrust Away From The Courts, Ganesh Sitaraman

Vanderbilt Law School Faculty Publications

A small number of firms hold significant market power in a wide variety of sectors of the economy, leading commentators across the political spectrum to call for a reinvigoration of antitrust enforcement. But the antitrust agencies have been surprisingly timid in response to this challenge, and when they have tried to assert themselves, they have often found that hostile courts block their ability to foster competitive markets. In other areas of law, Congress delegates power to agencies, agencies make regulations setting standards, and courts provide deferential review after the fact. Antitrust doesn’t work this way. Courts – made up of …

The Ncaa And The Rule Of Reason, Herbert J. Hovenkamp

All Faculty Scholarship

This brief essay considers the use of antitrust’s rule of reason in assessing challenges to rule making by the NCAA. In particular, it looks at the O’Bannon case, which involved challenges to NCAA rules limiting the compensation of student athletes under the NCAA rubric that protects the “amateur” status of collegiate athletes. Within that rubric, the Ninth Circuit got the right answer.

That outcome leads to a broader question, however: should the NCAA’s long held goal, frequently supported by the courts, of preserving athletic amateurism be jettisoned? Given the dual role that colleges play, that is a complex question, raising …

Justice Scalia And Sherman Act Textualism, Alan J. Meese

Faculty Publications

No abstract provided.

Trade Association, State Building, And The Sherman Act: The U.S. Chamber Of Commerce, 1912-25, Laura Phillips Sawyer

Scholarly Works

The U.S. Chamber of Commerce (USCC), and "organization of organizations," was conceived in 1912 in coordination with administrators at the Department of Commerce and Labor to promote the collection of commercially valuable trade information. A critical though often neglected, aspect of administrative state building has been the information-gathering and dissemination practices spearheaded by the Department of Commerce and later the Federal Trade Commission (FTC) in conjunction with the USCC. Rather than a strictly adversarial relationship, in the early twentieth century business-government relations created mutually constitutive administrative capacities in both private trade associations and public administrative agencies.

Sharing Economy Meets The Sherman Act: Is Uber A Firm, A Cartel, Or Something In Between?, Mark Anderson

Articles

The sharing economy is a new industrial structure that is made possible by instantaneous internet communication and changes in the life, work, and purchasing habits of individual entrepreneurs and consumers. Antitrust law is an economic regulatory scheme dating back to 1890 in the United States that is designed to address centrally controlled concentrations of economic power and the threats that those concentrations pose to consumer interests and economic efficiency. In order to accommodate a modern enterprise structure in which thousands or millions of independent contractors join forces to provide a service by agreement among themselves, antitrust law requires re-envisioning and …

Making Meaning: Towards A Narrative Theory Of Statutory Interpretation And Judicial Justification, Randy D. Gordon

Faculty Scholarship

The act of judging is complex involving finding facts, interpreting law, and then deciding a particular dispute. But these are not discreet functions: they bleed into one another and are thus interdependent. This article aims to reveal-at least in part-how judges approach this process. To do so, I look at three sets of civil RICO cases that align and diverge from civil antitrust precedents. I then posit that the judges in these cases base their decisions on assumptions about RICO's purpose. These assumptions, though often tacit and therefore not subject to direct observation, are nonetheless sometimes revealed when a judge …

In Praise Of All Or Nothing Dichotomous Categories: Why Antitrust Law Should Reject The Quick Look, Alan J. Meese

Faculty Publications

No abstract provided.

The New Antitrust Federalism, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

"Antitrust federalism, " or the rule that state regulation is not subject to federal antitrust law, does as much as-and perhaps more than-its constitutional cousin to insulate state regulation from wholesale invalidation by the federal government. For most of the last century, the Court quietly tinkered away with the contours of this federalism, struggling to draw a formal boundary between state action (immune from antitrust suits) and private cartels (not). But with the Court's last three antitrust cases, the tinkering has given way to reformation. What used to be a doctrine with deep roots in constitutional federalism is now a …

Antitrust Federalism And State Restraints Of Interstate Commerce: An Essay For Herbert Hovenkamp, Alan J. Meese

Faculty Publications

No abstract provided.

Promoting Innovation, Matthew Sag, Spencer Weber Waller

Faculty Articles

This Essay proceeds as follows. We briefly introduce the concept of creative destruction and its place in Schumpeter’s work in Part II. In Part III we explain why a truly Schumpeterian competition policy demands more than a laissez faire approach. We explain why the law must preserve opportunities and incentives for creative destruction at all stages of innovation and we review four key policy areas of antitrust law from this innovation-focused perspective: unilateral conduct cases (Part III.A), cases at the intersection of IP and antitrust (Part III.B), Sherman Act section 1 cases (Part III.C), and merger policy (Part III.D). In …

A Rapid Reaction To O'Bannon: The Need For Analytics In Applying The Sherman Act To Overly Restrictive Joint Venture Schemes, Stephen F. Ross, Wayne Desarbo

Journal Articles

This Article reviews the recent and highly publicized district court decision holding that NCAA rules, which bar student-athletes from any compensation for image rights, violated the Sherman Act, and that big-time athletic programs could lawfully agree among themselves to limit compensation to $5,000 annually in trust for each athlete upon leaving school. This Article briefly discusses why the decision correctly found the current rule to be illegal, but also details why, under settled antitrust law, the critical question of how much compensation would significantly harm consumer appeal for college football and basketball is a question better left to marketing science …

Kamakahi V. Asrm: The Egg Donor Price Fixing Litigation, Kimberly D. Krawiec

Faculty Scholarship

In April 2011, Lindsay Kamakahi caused an international stir by suing the American Society for Reproductive Medicine (ASRM), the Society for Assisted Reproductive Technology (SART), SART-member fertility clinics, and a number of egg donor agencies on behalf of herself and other oocyte donors. The suit challenged the ASRM-SART oocyte donor compensation guidelines, which limit payments to egg donors to $5,000 ($10,000 under special circumstances), as an illegal price-fixing agreement in violation of United States antitrust laws.

Ensuing discussion of the case has touched on familiar debates surrounding coercion, commodification, and exploitation. It has also revealed many misconceptions about oocyte donation, …

Defining Unreasonably Exclusionary Conduct: The 'Exclusion Of A Competitive Rival' Approach, Thom Lambert

Faculty Publications

Unreasonably exclusionary conduct, the element common to monopolization and attempted monopolization offenses under Section 2 of the Sherman Act, remains essentially undefined. Federal courts, including the U.S. Supreme Court, have purported to define the term, but the definitions they have offered are so indeterminate as to be, in the words of one prominent commentator, “not just vague but vacuous.” Seeking to fill the void left by the courts, antitrust scholars have in recent years proposed four universal definitions of unreasonably exclusionary conduct. Each, however, is deficient: One would fail to deter a substantial amount of anticompetitive conduct, and the other …

The Law And Economics Of (Functional) Antitrust Standing In The United States And The European Union, Jeffrey L. Harrison

UF Law Faculty Publications

To date, and despite pressures toward convergence, the United States and the European Union have taken different paths with respect to the enforcement of antitrust laws by private parties and, therefore, differ dramatically in levels of functional standing. U.S. law is more encouraging to private enforcement than E.U. law but has a narrower view of whom those private parties are permitted to be. In the European Union, the eligible parties are broad but the motivation of any single party to bring an action is quite low. In the United States, the substantive law and much of the procedural law flow …

The Tempting Of Antitrust: Robert Bork And The Goals Of Antitrust Policy, Daniel A. Crane

Articles

Of all Robert Bork’s many important contributions to antitrust law, none was more significant than his identification of economic efficiency, disguised as consumer welfare, as the sole normative objective of U.S. antitrust law. The Supreme Court relied primarily on Bork’s argument that Congress intended the Sherman Act to advance consumer welfare in making its landmark statement in Reiter v. Sonotone that “Congress designed the Sherman Act as a ‘consumer welfare prescription.’” This singular normative vision proved foundational to the reorientation of antitrust law away from an interventionist, populist, Brandeisian, and vaguely Jeffersonian conception of antitrust law as a constraint on …

The Market Power Model Of Contract Formation: How Outmoded Economic Theory Still Distorts Antitrust Doctrine, Alan J. Meese

Faculty Publications

Transaction cost economics ("TCE") has radically altered industrial organization's explanation for so-called "non-standard contracts, "including "exclusionary" agreements that exclude rivals from access to inputs or customers. According to TCE, such integration usually reduces transaction costs without producing anticompetitive harm. TCE has accordingly exercised growing influence over antitrust doctrine, with courts invoking TCE's teachings to justify revision of some doctrines once hostile to such contracts. Still, old habits die hard, even for courts of increasing economic sophistication. This Article critiques one such habit, namely, courts'continuing claim that firms use market or monopoly power to impose exclusionary contracts on unwilling trading partners. …

Competition Policy And The Great Depression: Lessons Learned And A New Way Forward, Alan J. Meese

Faculty Publications

The recent Great Recession has shaken the nation’s faith in free markets and inspired various forms of actual or proposed regulatory intervention displacing free competition. Proponents of such intervention often claim that such interference with free-market outcomes will help foster economic recovery and thus macroeconomic stability by, for instance, enhancing the “purchasing power” of workers or reducing consumer prices. Such arguments for increased economic centralization echo those made during the Great Depression, when proponents of regulatory intervention claimed that such interference with economic liberty and free competition, including suspension of the antitrust laws, was necessary to foster economic recovery. Indeed, …

Accommodating Labor And Antitrust, Stephen F. Ross

Journal Articles

In this article, the author comments on Professor Michael LeRoy's article "Federal Jurisdiction in Sports Labor Disputes" (2012 Utah L. Rev. 815) and explains why he disagrees with the claim that federal courts improperly invoke the Sherman Act in sports labor disputes.