Law Commons^™

Race-Ing Antitrust, Bennett Capers, Gregory Day

Michigan Law Review

Antitrust law has a race problem. To spot an antitrust violation, courts inquire into whether an act has degraded consumer welfare. Since anticompetitive practices are often assumed to enhance consumer welfare, antitrust offenses are rarely found. Key to this framework is that antitrust treats all consumers monolithically; that consumers are differently situated, especially along lines of race, simply is ignored.

We argue that antitrust law must disaggregate the term “consumer” to include those who disproportionately suffer from anticompetitive practices via a community welfare standard. As a starting point, we demonstrate that anticompetitive conduct has specifically been used as a tool …

The Impact Of Amex And Its Progeny On Technology Platforms, Kacyn H. Fujii

Michigan Law Review

Big Tech today faces unprecedented levels of antitrust scrutiny. Yet antitrust enforcement against Big Tech still faces a major obstacle: the Supreme Court’s 2018 decision in Ohio v. American Express. Popularly called Amex, the case imposed a higher initial burden on antitrust plaintiffs in cases involving two-sided markets. Two-sided markets connect two distinct, noncompeting groups of customers on a shared platform. These platforms have indirect network effects, meaning that one group of customers benefits when more of the second group of customers joins the platform. Two-sided markets are ubiquitous in the technology sector, encompassing social media, search engines, …

Reviving Antitrust Enforcement In The Airline Industry, Jonathan Edelman

Michigan Law Review

The Department of Transportation (DOT) has broad but oft overlooked power to address antitrust issues among airlines through section 411 of the Federal Aviation Act. However, the DOT’s unwillingness to enforce antitrust more aggressively may be translating into higher fares and fees for airline travelers.

More aggressive antitrust enforcement is urgently needed. Recent research has revealed a widespread practice of common ownership in the airline industry, whereby investment firms own large portions of rival airline companies. Although this practice leads to higher prices and reduced competition, antitrust regulators, from the DOT to the Department of Justice and the Federal Trade …

Home-Field Disadvantage: How The Organization Of Soccer In The United States Affects Athletic And Economic Competitiveness, Carolina I. Velarde

Michigan Law Review

The United States men’s soccer team failed to qualify for the 2018 World Cup. In the aftermath, soccer followers questioned the organizational structure supervised by the United States Soccer Federation. An analysis of the relationships between professional soccer leagues reveals potentially anticompetitive practices that may contribute to the subpar performance of the U.S. Men’s National Team. This Note argues that the United States Soccer Federation is engaged in economically anticompetitive behavior that impedes the development of American soccer. Certain reforms, including an open-league system and player transfer fees at the youth development level, would enhance the economic and athletic competitiveness …

How Meyer V. Uber Could Demonstrate That Uber And The Sharing Economy Fit Into Antitrust Law, Nicholas Andrew Passaro

Michigan Business & Entrepreneurial Law Review

Recently, Uber driver (and former Uber CEO) Travis Kalanick has been sued under antitrust laws. The plaintiffs argue that Mr. Kalanick and the other Uber drivers have engaged in a price fixing arrangement that violates §1 of the Sherman Act. The case, Meyer v. Uber (originally Meyer v. Kalanick), is still being litigated. This Comment will analyze each side’s potential arguments and will ultimately conclude that the court should find Uber drivers not guilty of a Sherman Act violation. This determination will be based on: the merits of the various arguments, how such a holding would fit within the …

State-Action Immunity And Section 5 Of The Ftc Act, Daniel A. Crane, Adam Hester

Michigan Law Review

The state-action immunity doctrine of Parker v. Brown immunizes anticompetitive state regulations from preemption by federal antitrust law so long as the state takes conspicuous ownership of its anticompetitive policy. In its 1943 Parker decision, the Supreme Court justified this doctrine, observing that no evidence of a congressional will to preempt state law appears in the Sherman Act’s legislative history or context. In addition, commentators generally assume that the New Deal court was anxious to avoid re-entangling the federal judiciary in Lochner-style substantive due process analysis. The Supreme Court has observed, without deciding, that the Federal Trade Commission might …

The New Road To Serfdom: The Curse Of Bigness And The Failure Of Antitrust, Carl T. Bogus

University of Michigan Journal of Law Reform

This Article argues for a paradigm shift in modern antitrust policy. Rather than being concerned exclusively with consumer welfare, antitrust law should also be concerned with consolidated corporate power. Regulators and courts should consider the social and political, as well as the economic, consequences of corporate mergers. The vision that antitrust must be a key tool for limiting consolidated corporate power has a venerable legacy, extending back to the origins of antitrust law in early seventeenth century England, running throughout American history, and influencing the enactment of U.S. antitrust laws. However, the Chicago School’s view that antitrust law should be …

Market Power In Power Markets: The Filed-Rate Doctrine And Competition In Electricity, Sandeep Vaheesan

University of Michigan Journal of Law Reform

State and federal initiatives have opened the American electric power industry to competition over the past four decades. Although the process has not occurred uniformly across the country, wholesale electricity markets exist everywhere today. Independent power producers can construct generation facilities and sell their output to utilities and industrial customers through bilateral contracts. In many regions, centralized power markets now facilitate the sale of billions of dollars in electricity annually through auctions. Although market forces have replaced direct price regulation in electricity, antitrust enforcement has not expanded its role commensurately. A lack of competition has been a serious problem in …

Shutting The Black Door: Using American Needle To Cure The Problem Of Improper Product Definition, Daniel A. Schwartz

Michigan Law Review

Section 1 of the Sherman Act is designed to protect competition by making illegal any agreement that has the effect of limiting consumer choice. To make this determination, courts first define the product at issue and then consider the challenged restraint's impact on the market in which that product competes. When considering § 1 allegations against sports leagues, courts have tended to define products according to the structure of the leagues. The result of this tendency is that harm to competition between the leagues' teams is not properly accounted for in the courts' analyses. This, in turn, grants leagues a …

Lorain, Aspen, And The Future Of Section 2 Enforcement, Xiao Jeff Liu

Michigan Telecommunications & Technology Law Review

The Sherman Antitrust Act § 2 makes monopolizing or attempting to monopolize a particular trade or aspects of a trade a federal felony. More specifically, Section 2 of the Act addresses a firm's unilateral conduct. Under the administration of former President George W. Bush, a comprehensive guideline titled Competition and Monopoly: Single-Firm Conduct under Section 2 of the Sherman Act ("Bush Guidelines") was adopted in September of 2008 for enforcing Section 2 violations. Under President Barack Obama's administration, however, the enforcement of antitrust laws is expected to undergo a radical transformation. On May 11, 2009, Christine A. Varney, the Assistant …

Keeping The Door Ajar For Foreign Plaintiffs In Global Cartel Cases After Empagran, Jeremy M. Suhr

Michigan Law Review

In many ways, the Supreme Court's opinion of F. Hoffmann-LaRoche Ltd. V. Empagran S.A. raised more questions than it answered. Growing out of the massive international vitamins cartel uncovered in the 1990s, Empagran presented a scenario in which all parties were foreign and all conduct occurred abroad. Although it is "well established by now that the Sherman Act applies to foreign conduct that was meant to produce and did in fact produce some substantial effect in the United States," Empagran presented the Court with the first truly foreign antitrust case. It involved not only foreign conduct, but also foreign plaintiffs …

Reevaluating Amateurism Standards In Men's College Basketball, Marc Edelman

University of Michigan Journal of Law Reform

This Note argues that courts should interpret NCAA conduct under the Principle of Amateurism as a violation of§ 1 of the Sherman Antitrust Act and that courts should order NCAA deregulation of student-athletes' indirect financial activities. Part I of this Note discusses the history of NCAA regulation, specifically its Principle of Amateurism. Part II discusses the current impact of antitrust laws on the NCAA. Part III argues that the NCAA violates antitrust laws because the Principle of Amateurism's overall effect is anticompetitive. Part IV argues the NCAA could institute an amateurism standard with a net pro-competitive effect by allowing student-athletes …

The Report Of The Attorney General's National Committee To Study The Antitrust Laws: A Retrospective, Thomas E. Kauper

Michigan Law Review

In 1955, the third year of the Eisenhower administration, the Michigan Law Review published what I believe to be the only symposium on antitrust law ever to appear in its pages. The occasion was the release in March of that year of a Report of the Attorney General's National Committee to Study the Antitrust Laws,2 a nearly fourhundred- page examination of virtually all facets of federal antitrust doctrine and enforcement. The pages of the symposium led me of course to revisit the Report itself, a visit a little like seeing an old high school friend long forgotten some forty years …

The Anticompetitive Effect Of Passive Investment, David Gilo

Michigan Law Review

There are many cases in which a firm passively invests in its competitor. For example, Microsoft passively invested in $150 million worth of the nonvoting stock of Apple, its historic rival in the operating systems market. Also, in November 1998, Northwest Airlines, the nation's fourth-largest airline, purchased 14% of the common stock of Continental Airlines Inc., the nation's fifth-largest (and fastest growing) airline. Northwest competes with Continental on seven routes, serving 3.6 million passengers per year. In another example, TCI, the nation's largest cable operator, became a passive investor with a 9% stake (which can be increased, under the terms …

Antitrust Beyond Competition: Market Failures, Total Welfare, And The Challenge Of Intramarket Second-Best Tradeoffs, Peter J. Hammer

Michigan Law Review

Should antitrust law ever sanction the accumulation of market power or permit other restraints of trade if such conduct would increase social welfare? This is the challenge raised by intramarket second- best tradeoffs. The lesson of second-best analysis is that one market failure can sometimes counteract the effects of another market failure. In the presence of multiple market failures, it is conceivable that mergers or other restraints traditionally viewed as anticompetitive may be welfare-enhancing. A social planner, given the mandate of maximizing total welfare, would permit such restraints. Could an antitrust judge come to the same result under a defensible …

Aba Accreditation Of Law Schools: An Antitrust Analysis, Andy Portinga

University of Michigan Journal of Law Reform

The accreditation activities of the American Bar Association are under attack. From within legal academia, professors and deans complain that the ABA accreditation process is overly formalistic and intrusive. In addition, the Massachusetts School of Law has sued the ABA, alleging that the ABA's accreditation standards violate the Sherman Act. From outside legal academia, the Department of Justice has investigated the ABA's accreditation activities and initiated an antitrust suit against the ABA. The Department of Justice and the ABA immediately settled this suit, and, as a result of this settlement, the ABA has agreed not to enforce certain standards and …

Antitrust's Protected Classes, Herbert Hovenkamp

Michigan Law Review

For purposes of argument, this essay assumes that efficiency ought to be the exclusive goal of antitrust enforcement. That premise is controversial. Nonetheless, several economic and legal theorists, primarily among the Chicago School of economics and antitrust scholarship, have developed an Optimal Deterrence Model based on this assumption. The Model is designed to achieve the optimum, or ideal, amount of antitrust enforcement. The Model's originators generally believe that there is too much antitrust enforcement, particularly enforcement initiated by private plaintiffs. I intend to show that, even if efficiency is the only antitrust policy goal, a broader array of lawsuits should …

Recognition Of The National Football League As A Single Entity Under Section 1 Of The Sherman Act: Implications Of The Consumer Welfare Model, Myron C. Grauer

Michigan Law Review

This article argues that Justice Rehnquist has analyzed the operational structure of the NFL in a manner that is consistent with proper antitrust enforcement policy, and expands upon the view that he espoused. It contends that the NFL is analogous to a law firm partnership, with the teams analogous to departments or partners that can make operating rules for the firm without fear of violating section 1 of the Sherman Act. In arriving at the opposite conclusion, both the Oakland Raiders and NASL courts relied on several cases involving player restraints that presupposed that teams in professional sports leagues, such …

Sherman Act Applications To Predation By Controlled Economy Enterprises Marketing In The United States: Departures From Mechanical Formulae, Deborah M. Levy

Michigan Journal of International Law

In a reproachful dissent in United States v. Columbia Steel, the late Justice Douglas sought to remind his brethren what the antitrust laws of the United States are all about: [A]ll power tends to develop into a government in itself. Power that controls the economy should be in the hands of elected representatives of the people, not in the hands of an industrial oligarchy. Industrial power should be decentralized.... That is the philosophy and the command of the Sherman Act.

Failing Companies And The Antitrust Laws, Janet L. Mcdavid

University of Michigan Journal of Law Reform

This article will examine two areas in which the courts have given financially-troubled companies special treatment under the antitrust laws. Part I discusses the acquisition of a failing company, which may constitute a judicially-created exemption from section 7 of the Clayton Act. Part II considers certain cases involving failing companies whose conduct is challenged under section 1 of the Sherman Act.

The Professions And Noncommercial Purposes: Applicability Of Per Se Rules Under The Sherman Act, Jonathan Cobb Dickey

University of Michigan Journal of Law Reform

This article will examine the doctrine of noncommercial purpose in the professional context and assess whether conduct undertaken by the professions conforms to the presumptions underlying the per se doctrine. It is the thesis of this article that the per se doctrine should not preclude inquiry into whether a valid noncommercial purpose justifies conduct undertaken in good faith by a profession to regulate its membership or to advance some other public interest. This article concludes that, with respect to professions, the goals of the Sherman Act are better served by inquiry into noncommercial purposes and application of the rule of …

Antitrust Law: An Economic Perspective, Thomas E. Kauper

Michigan Law Review

A Review of Antitrust Law: An Economic Perspective by Richard A. Posner

Intra-Enterprise Conspiracy Under Section 1 Of The Sherman Act: A Suggested Standard, Michigan Law Review

Michigan Law Review

Section I of this Note analyzes the cases in which the Supreme Court has implied a doctrine of intra-enterprise conspiracy. Section II then sets forth the theoretical and practical difficulties that such a doctrine entails. Section III, in turn, considers previous proposals for limiting the scope of the intra-enterprise conspiracy doctrine and examines their deficiencies. Finally, section IV presents an alternative analysis of the intra-enterprise conspiracy issue and proposes a standard for determining when application of section 1 of the Sherman Act to parent-subsidiary relations is inappropriate.

The Sherman Act And Bar Admission Residence Requirements, Harvey Freedenberg

University of Michigan Journal of Law Reform

This article will focus on the restrictive aspects of residence qualifications for admission to the state bar. Such restrictions are significant in three cases: initial admission to the bar, relocation by a foreign attorney, and multistate practice by an attorney admitted to the bar in another state. An attempt will be made to determine whether these requirements might be invalid under the Sherman Act and to analyze the case for their abolition. The commercial counterpart of professional entry restrictions has been termed "the very essence of monopoly,” and on this basis it is submitted that further freedom from antitrust scrutiny …

Territorial Restrictions And Per Se Rules--A Re-Evaluation Of The Schwinn And Sealy Doctrines, Michigan Law Review

Michigan Law Review

Horizontal territorial restrictions have traditionally been said to be per se illegal. That is, they are illegal no matter what effect they may have on competition. The legality of vertical territorial restrictions, however, is still an unsettled issue. The past decade saw a trend toward considering such restrictions per se violations of section I of the Sherman Act. That trend culminated in United States v. Arnold, Schwinn & Co., a case better known for its speculation than its reasoning. The Supreme Court, which ostensibly announced the per se illegality of these restrictions in Schwinn, will have an opportunity …

The "Warren Court" And The Antitrust Laws: Of Economics, Populism, And Cynicism, Thomas` E. Kauper

Michigan Law Review

No one could quarrel with the simple assertion that the so-called "Warren Court" has had a significant, if indeed not extraordinary, impact on the development of the antitrust laws. It could hardly have been otherwise. The fifteen years since 1953 represent virtually one-fourth of the total history of the Clayton and Federal Trade Commission Acts, and one fifth of the time which has elapsed since passage of the Sherman Act. Every Supreme Court decision under the 1950 amendments to section 7 of the Clayton Act, the so-called antimerger law, has come after the accession of Chief Justice Warren to the …

Hawley: The New Deal And The Monopoly Problem, Arthur D. Austin

Michigan Law Review

A Review of The New Deal and the Monopoly Problem By E. W. Hawley

Boycotts And Restrictive Marketing Arrangements, Richard M. Buxbaum

Michigan Law Review

It is currently a common if still relatively unheralded practice for a "fired" dealer to bring an antitrust action against his former manufacturer-supplier (and perhaps other dealers), alleging that his termination was the result of a boycott. Boycotts-collective efforts to obtain the exclusion of a party from a market-are illegal per se under section 1 of the Sherman Act. Thus, questions concerning the justification for the boycott or the significance of the offender's market position do not arise.

American Bar Association Section Of Antitrust Law: Jury Instructions In Criminal Antitrust Cases, Ralph M. Carson

Michigan Law Review

A Review of Jury Instructions in Criminal Antitrust Cases by The American Bar Association Section of Antitrust Law

Antitrust Significance Of Covenants Not To Compete, Michigan Law Review

Michigan Law Review

Covenants not to compete, despite their increasing prevalence and their obvious tendency to restrain competition, have seldom been attacked under either federal or state antitrust laws. In January 1965, however, William H. Orrick, Jr., then Assistant Attorney General in charge of the Antitrust Division, noted that the Division was becoming concerned about one aspect of the problem-the taking of overbroad covenants not to compete in connection with the purchase of a competitor. He suggested that such an agreement might have anticompetitive effects under either the Sherman Act or section 7 of the Clayton Act. This note will explore the present …