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Document Type

Article

Publication Date

Spring 2019

Publication Citation

94 Indiana Law Journal 501 (2019)

Abstract

The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating procompetitive effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their behavior.

But which of these myriad justifications are valid? To leading jurists and scholars, this has remained an “open question,” even an “absolute mystery.” Examination of the relevant case law reveals multiple competing approaches and seemingly irreconcilable opinions. The ongoing lack of clarity in this area is inexcusable: procompetitive-justification analysis is vital to a properly functioning antitrust enterprise.

This Article provides answers and clarity. It identifies the market failure approach to analysis as doctrinally correct and economically optimal. The leading alternatives pose an unacceptably high risk of error, in the form of both false positives and false negatives. Most importantly, the Article identifies the proper, three-step method for assessing procompetitive justifications. This three-step analytical framework increases transparency and rigor, minimizes errors, and maximizes welfare.

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