The Antitrust Enterprise: Principle and Execution: An Introduction

By Hovenkamp, Herbert | Journal of Corporation Law, Winter 2006 | Go to article overview

The Antitrust Enterprise: Principle and Execution: An Introduction


Hovenkamp, Herbert, Journal of Corporation Law


On April 1, 2005, the University of Iowa College of Law hosted a symposium entitled The Antitrust Enterprise: Principle and Execution.1 The general topic of the symposium was the effective administration of the antitrust laws, focusing on four areas: exclusionary practices, intellectual property, private enforcement, and antitrust reform.

Greg Werden of the Antitrust Division of the United States Department of Justice spoke on a panel concerned with unilateral exclusionary practices under section 2 of the Sherman Act. He elaborated his "no economic sense" test for exclusionary conduct. Under that test a dominant firm's unilateral conduct that injures its rivals is not unlawful unless the conduct would make no economic sense but for its tendency to eliminate or lessen competition.2 This test places a significant burden on plaintiffs and results in only a small proportion of conduct being deemed unlawfully exclusionary, but Werden argues that it is necessary to limit the false positives to which section 2 claims have seemed particularly conducive. This is true, Werden argues, even though some of the conduct that survives such a test in fact harms consumers.

By contrast, Craig Wildfang, a lawyer with the Minneapolis firm of Robins, Kaplan, Miller & Ciresi, argues that a more aggressive, pro-plaintiff test is necessary to deal with claims of anticompetitive discounting.3 Focusing mainly on the Eighth Circuit's decision in Concord Boat,4 Wildfang argues that volume or "market share" discounts can be used anticompetitively to deprive rivals of sufficient output to enable them to attain minimum efficient scales of production. As a result, rivals face higher costs and the dominant firm can then increase its own prices under the umbrella thus created.

Professor James Speta of Northwestern University Law School examines one particular aspect of the Supreme Court's Aspen and Trinko decisions,5 considering whether antitrust should provide a remedy when a utility refuses to sell to a rival even at the same retail price that is offered to non-competitor customers.6 As Professor Speta notes, the duty of common carriers to serve all customers on nondiscriminatory terms is well established in the law of public utilities. In addition, some regulatory provisions, including the 1996 Telecommunications Act, require firms under their jurisdiction to set specific, lower wholesale rates to those wishing to resell in competition with the seller. While these are well established regulatory requirements, Professor Speta notes, they are not "customary antitrust goals."7 Indeed, the Telecommunications Act was an "experiment" in encouraging new entry by requiring incumbent firms to sell to rival downstream sellers at very low rates in order to "accelerate" the move from single-firm dominance to competition in the telecommunications sector. However, "antitrust law does not attempt such experiments."8 Professor Speta concludes that, while some of Trinko's conclusions about refusals to deal seem misplaced, the concern about appropriate antitrust remedies for public utility refusal to deal is not. Effective remedies are too complex to be administered by generalist antitrust courts. Such "essential facilities" problems are best "left to legislators and regulators."9

In a panel devoted to intellectual property rights and antitrust policy, Michael A. Carrier, professor of law at Rutgers-Camden, examined the implications of the Supreme Court's Trinko decision10 for the law of intellectual property and antitrust.11 Carrier concludes that Trinko's language, which was unnecessarily hostile to refusal to deal claims, virtually forecloses any possibility that courts can condemn refusals to license IP rights under the Sherman Act. Carrier also laments the fact that the Court's discussion of antitrust doctrine was overly broad and unnecessary to the outcome of that decision. Insofar as the refusal to license IP is concerned, Carrier argues that the Court's decision tended to short circuit the debate rather than resolve it

April Franco and Matthew Mitchell, professors of economics at the University of Iowa, followed with a paper on employment mobility laws and their effect on competition. …

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