Clayton Act Against Monopolization by Tying, 287 Dealership, 256

Cambridge University Press 052179031X - Antitrust Law: Economic Theory and Common Law Evolution Keith N. Hylton Index More information

Index

A.A.Poultry Farms, Inc.v.Rose Acre Clayton Act against Farms, Inc., 216–18 monopolization by tying, 287 abusive business, 167, 171 dealership, 256, 260, 264 conduct-focused test of, 187, 188, exclusivity, 262–4 188n13, 193 inference doctrine development intent to monopolize for, 187, 188, for, 132–40, 145 193, 194 inferred versus not, 141 refusal to deal by, 187, 247 Interstate circuit and, 133–8 Section 2 violation for, 188, 190 noncompete, 33–4, 100, 103, 257, access. See also essential facility 264 local association, 180 resale price, 269 problems of open, 208–11 termination of (vertical restraints), up-front fee for, 212 270–1, 272–3, 275–6 acquittals, false, 130–1, 189, 214, 220, unilateral contract theory for, 351, 375 138–40, 158 administrative concerns unilateral contract theory rejection courts errors and, 130–1 for, 140–3, 158 economic reasonableness v., vertical restraint, 270–8 xiii–xv, 92, 106–7, 116, 171 vertical restraints and exclusivity, per-se rule and, 122 262–4 Administrative Procedure Act, 48 airline industry, as example of adverse selection, 5–6, 24 parallel pricing, 73 Aghion, Phillipe, 199n30, 200–1 Akerlof, George, 24–5 agreement(s), 28, 75, 132–3, 222 Albrecht v.The Herald Co., 123n17, to boycott, 166, 168, 169–70, 184 262, 262n21, 262n23, 273, cheating on collusive, 145, 153–4 277

379

380 Index

Alcoa.See United States v.Aluminum Associated Press v.United States, Co.of America (Alcoa) 177–81, 182, 184, 208–10 Allied Tube & Conduit Corp.v. association Indian Head, Inc., 361–3, 366 dissemination of information and, allocation 146–9 horizontal, 126 as extragovernmental agency, 170, territorial, 118, 119 171, 179–80 Ambook Enterprises v.Time, 141n26 new competition practice of, 146 American Column & Lumber Co.v. price fixing in, 106, 118–19, 121 United States, 145–9, 149–52, price-setting cooperative, 120 154 product standard setting by American Tobacco Growers, Inc.v. private, 361–2 Neal, 208, 210, 211 protection of access for local, 180 American Tobacco v.United States, restraint of trade and bylaws of, 77, 139–40, 158, 195 177–8 anticompetitive theory veto in, 178, 180, 181 tying, after Chicago School and, Atlantic Richfield Co.(ARCO) v. 281–3, 288 USA Petroleum Co., 218, tying and difficulty with, 307–10 262n23 tying, Chicago School and, 279–81 atomism, 40, 190 vertical mergers and, 335 perfect competition and, 4, 8 Antitrust Division. See Justice attempt, at monopolization Department Clayton Act and, 287 antitrust law. See also Clayton Act; dangerous probability requirement Sherman Act of, 244–5, 246, 248–51, 263 Antitrust Paradox (Bork), xii definition of, 244 Appalachian Coals v.United States, evidence, objective, in, 245, 250 107–9, 111 evidence of unfair tactics in, 247, apprehension 249 enforcement and probability of, exclusion of competitors with, 247 50, 51 right/refusal to deal in, 246–8, Areeda, Philip, 220–1, 230, 248n15 246n7, 263–4 Arizona v.Maricopa County Medical specific intent of, 245, 246, 247–51 Society, 122–5, 122n17, 126n23 the Swift formula and modern Arrow-Hart & Hegman Electric Co.v. doctrine of, 244–8 FTC, 318n24 violation of, 244 ASCAP, 120–2 attorneys’ fees, and deterrence, 58 Aspen Skiing Co.v.Aspen Highlands author, opinion of, xi Skiing Corp., 203–6, 207, 210, Automatic Radio Mfg.Co, v.Ford 228, 231n2 Motor Co., 295n42

Index 381

Bain, Joe, 16 Associate Press and, 177–81 bargaining, 159–60, 342–3 competition effected by, 170–1, barriers, 23. See also entry 174–5 artificial (privately created), 15–16 conspiracy’s proof/rule of reason natural barrier to, 16 for, 166, 167, 168, 169–70 Barry Wright Corp.v.ITT Grinnell direct-selling wholesalers, retailers Corp., xv, 199n32, 214–15, 219, and, 167 224 efficiency defenses for, 176 basing point pricing, 81 eliminating of firms by, 174–6 cases, 155–9 exclusionary plan and, 173–4, 177, competition and, 162–5 180 cross-hauling and, 162 exclusions, rule of reason and, definition of, 154–5 181–2 delivered pricing system and, free option arrangement, members 158–9, 161–2 and, 167–8 economics, 160–5 Klor’s paradox, boycott doctrine and kinked demand curve, 163 and, 174–7 freight absorption and, 162 no effect on competition and, most favored customer clause and, 172–4 159–60 in noncompetitive political arena, per-se rule not, 158–9, 164 359, 360, 363–4, 365, 366, 369 Bauer & Cie v.O’Donnell, 261 per-se rule and, 166, 169–70, 171, Becker, Gary, 44 173, 177, 179–82, 184, 185 Bendix Corp., 348–9, 350 post-BMI/Sylvania and, 172, 181–5 benefit, potential competition, 345 post-Socony, 170–7 Berkey Photo v.Eastman Kodak Co., pre-Socony, 166–70 203 price-fixing, 169, 171 Bertrand, Joseph, 76–7, 76n15, 83–5, proof versus conspiracy to, 171 150 public harm and, 173–6, 184 Blair, Roger, xvi restriction of distributors freedom blanket license arrangement, 120–1 prohibited in, 168–9 block booking, 292 rule of reason and, 166–70, 173–4, BMI. See Broadcast Music Inc.v. 182, 183, 184–5 Columbia Broadcasting System brand loyalty, 73 Bobbs-Merrill Co.v.Strauss , 261, brand name, 25–6 261n19 Brandeis, Justice, 148, 152 Bolton, Patrick, 199n30, 200–1 Breyer, Judge, 215 boycotts, 29, 155, 157, 166, 168, 169–70 Breyer, Justice, xv agreement to, 166, 168, 169–70, bribes, 8, 358, 367, 369 184, 264 bright line rule, 215, 220–1, 320

382 Index

Broadcast Music Inc.(BMI) v. buyers Columbia Broadcasting System, lying by, 72 120–2, 124–5, 128–9, 166, 172, 182, 184, 289 California Motor Transport Co.v. Brooke Group Ltd.v.Brown & Trucking Unlimited, 356–7, 363, Williamson Tobacco Corp., 214, 368–71 219 California Retail Liquor Dealers Assn Brown Shoe Co.v.United States, 311, v.Midcal Aluminum, 372, 374 318–20, 321, 322, 323, 325, 327, California v.American Stores Co., 338–41 55n24 Brunswick Corp.v.Pueblo Bowl-O- California.v.ARC , 63n40 Mat,63 cartels, 18n13, 99n17. See also Buffalo Courier-Express, Inc.v. boycotts; collusion Buffalo Evening News, Inc., basic theory of, 68–71 217n64 collusion and, 69–73 Bureau of Competition, 48, 50n10 conscious parallelism for, 73–89 Bureau of Consumer Protection, 48 conspiracy doctrine, conscious Bureau of Economics, 50n10 parallelism and, 75, 87, 89 Burger, Justice, 119 cooperative elements of, 122 business. See also corporation enforcement, 70–1, 87–8, 136, 146, anticipation by, 76 337 capacity constrained, 115 inferring conspiracy for, 87–9 failure of competitor, 320, 327, 339 inﬂuence government for internal capital market for, 312, regulated price by, 367 312n7 informal exchange relationships in, lack of resources of, 320 71 larger relationship to smaller, 204, instability of, 68–9, 76n14, 159, 160, 320 216 material reserves for, 327–8 interdependence theory and, 76–7, protection of small, 40–2, 192–3, 81–2, 86, 87 320–1, 323, 339 intraenterprise conspiracy and, 74, right/refusal to deal in, 246–8, 78–80 246n7, 263–4, 270 lying by buyers of, 72 risk taking compensation for, market share of, 72 231–2, 269–70, 293, 295 monitoring of, 71–3, 86, 87–8, 136 self-dealing in, 337 output versus price agreements size, 188, 190, 193, 204 with, 72 vertically integrated, 203 price-ﬁxing, 17–18, 62, 68–9, 80n27, Business Electronics v.Sharp 87, 107–8, 253, 256, 338 Electronics, 275–7 sales, 107–8

Index 383

stable, 71n3, 73 rule of reason and, 305, 317 casebook, drawback of, xi Section 7, competition CBS, 120–1, 128 substantially reduced and, 56–7, Cellophane.See United States v.E.I. 318, 319–20, 322, 323, 325, 330, du Pont De Nemours & Co. 335, 338, 339, 347, 350 (Cellophane) Sherman Act and, 47, 54 Cement Institute.See Federal Trade stock transfers and, 318, 335, Commission v.Cement Institute 335n9, 336 Cement Manufacturers Protective tying and, 285–6, 290, 293, 294 Assn. v.United States, 167–9, vertical mergers and, 335–6 171–2, 178, 181 Cline v.Frink Dairy Co,31 Central Shade Roller Co.v.Cushman, Clorox.See Federal Trade 101n20 Commission v.Proctor & chain-store paradox, 225–6, 226n76 Gamble Co.(Clorox) , 344–8 Chamberlain, Edward, 22, 75n12, 76 Coase, Ronald, 8, 242–3, 333, 341–2 Chicago Board of Trade v.United Coke, Edward, 36 States, 104–7, 108, 109, 109n37, collusion, 68–9, 222 111–12, 116, 117, 119, 126–8, avoidance of per-se rule in, 117 129, 153, 172, 174, 183, 184, brand loyalty and, 73 267n41, 365n24 cartels and, 69–73 Chicago School, 280–1, 308 cheating on agreement of, 145, City of Columbia v.Omni Outdoor 153–4 Advertising, 367, 369, 377 circumstantial evidence for, 73, 133 Clayton Act, 30, 39–40 concentration and, 156, 312 amendments to, 318, 335, 338 enforcement of, 70–1, 87–8 against attempt of monopolization, evidence and, 135 287, 304, 307 explicit versus tacit, 145 commodities affected by, 290, lying by buyers in, 72 290n29, 293, 294 monitoring of, 72–3, 153 consumer protection with, 320, one-shot versus repeat-player, 349–50 70–1, 96 exclusive dealing and, 303, 304 retail price maintenance, 253 ﬁne/punishment of, 47, 48–9, 52 stable versus instability of, 69–70, horizontal mergers and, 318, 320 71n3, 135 injunctions under, 55, 55n24, 56 tacit, 73–4, 75, 76–7, 85, 86–8, injury requirement of, 218 88n39, 140, 145, 149, 153, 219 private actions, treble damages and trigger strategy, 77 and, 58, 60 tying facilitating of, 283 protection of small businesses vertical mergers facilitation of, with, 320 337–8, 337n12, 340

384 Index

Combination Laws, 35, 53 consumer welfare v., 172–3 Commerce Clause, 39 cream-skimming, 227n79 common law destroying of, 55, 196, 203, 207, adjudication, xiv 215, 229 background for Sherman Act, 30–7 dominant strategy and, 69, 69n2, toward certainty, 105–6 96, 135, 160, 221, 306 criminal conspiracy in, 31, 35, essential facility, cost-reducing 35n29, 37 facility and, 208, 210 economic reasonableness and, xiv, fair access for, 180 92–3, 98–100, 102–3, 107, 109, foreclosure on, 286–7, 303, 304, 109n37, 112 305–7, 311–12, 319, 325–6, 327, market interference and, 31, 32–3 335, 337–40 of monopoly, 31, 35–7 foreign, 237 per-se illegality and, 80n27, 90, fringe, 241 104, 107, 112 geography limitations for, 347n22 predatory pricing and, 213, 227 intrabrand, 120, 178, 178n18, 180, restraint of trade and, 31, 33–4, 37, 266, 267, 288 91–4, 100, 100n20, 104, 318, local versus national, 322–3 319–20, 322 market interference statutes to ruinous competition and, 94–8, 99 suppress, 32–3 rule of reason of, 116 maximizing of, 350 Sherman Act abandonment of, meeting, 289 93–4, 103–4 mergers (nonhorizontal) and Sherman Act case against standard nonreduction of, 333 of, 101–4 mergers and reduction of, 56–7, Sherman Act (Section 1) v., 90– 57n29, 95, 311–12, 319, 325–6, 104 327, 335, 338 Sherman Act’s validity crisis and, monitoring of competitor and, 98–101, 326 212 theory, xiii monopoly as absence of, 1 competition, 55. See also exclusion monopoly up to levels of, 14–15 absence of, 125–6, 179 over competitors, 173 actual potential, 345 potential competition theory and, anti, 79, 158–9, 162, 165, 169, 175, 344–9 176, 178, 191, 193, 253, 279–83, predatory pricing versus pricing 307–10, 335, 368 for, 214–18 basing point pricing and, 162–5 price restraints/increase and, 232– boycotts and, 170–5 4 concentration inﬂuence on, price-cutting, 95, 115, 150, 153, 319–25, 327 212–13, 242, 281

Index 385

price fixing to reduce intrabrand mobility for, 6–7 then enhance interbrand, no third-party effects on, 7–8 118–19, 122 perfect information for, 5–6, 24 product quality not grounds for profit maximization in, 10–11, 37 restraint on, 125–7, 184 specialization, cost curve and, 11 product extension mergers U-shaped long run average cost noneffect on, 344–5 curve in, 11–12 with professional services, 29n7 complementary goods, and tying, 280 professionalism, no competitive complexity, as factor in inferring bidding and, 125–6 agreement, 134, 135, 136 regulating versus restraint of, concentration 104–5, 112, 119 and collusion, 156, 312 restraint of trade against, 104–5, competition influenced by, 319–25, 111, 116, 118–19, 127–8, 153, 327 169, 170, 171, 173, 178, 197, 290, horizontal mergers and, 311–12, 318, 319–20, 322, 325, 366 319–25 retaliation against, 347 insignificant, 327 risk taking compensation and, measurements/regimes of, 328–30, 231–2, 269–70, 293, 295 341, 350–1 ruinous, 94–8, 99 percentage of, 322, 324, 327, 329, Sherman Act and, 32–3, 116 330 small business protection and, profit improvement from, 312, 40–2, 320, 323, 339 312n3 survival of the fittest and, 192 in relevant market, 320–2 tying confuses consumer and, vertical mergers and, 339–40 309–10 conglomerate mergers undercutting costs and, 212–13, acquiring existing firms in, 346, 215 350 unstable, 115 Clayton Act, competition competition, perfect substantially reduced and, 347 atomism and, 4, 8 competition, acquisition of conscious parallelism and, 81 competitor and, 350 consumer and, 334 consumer benefit and, 345–6, definition of, 4–8 349–50 homogeneous products for, 8 definition of, 344 infinitely elastic demand curve in, efficiency defense and, 347 10, 21 enforcement guidelines for, 350–1 long run competitive equilibrium, enforcement, reduction of zero economic profit and, 9–12 competition and, 346 market behavior not in, 26 entry of, 345, 346, 347–8, 349, 350

386 Index

conglomerate mergers (cont.) Posner on, 85–9, 165 leverage with, 347 Rahl on, 74–80, 85, 87–9 per-se rule not for, 349 real conspiracy and, 81 potential competition critique and, Turner on, 80–3, 85, 87–9, 165 349–50 consensus standard making, 361 potential competition expansion consigning, 257–8, 268, 269 for, 348–9 conspiracy, 74, 273, 329 potential competition limits for, burden of proof with, 150, 167, 345–6 168, 169 potential competition theory common law and criminal, 31, 35, structure for, 344–5 35n29, 37, 111 potential competition’s entry for, complexity of, 134, 135, 136 345–8 conduct versus structure for, 79, for predatory pricing, 347 89 product extension mergers of, conscious parallelism and, 75, 344–5 77–8, 80n27, 81 Connally v.General Construction Co., current price information and, 146, 31 147–8, 154 conscious parallelism duality for, 28, 28n4, 75, 79 anticompetitive conduct inferred evidence for, 73, 89, 133 in, 79 government access barred from collusion, concentration in mergers others by, 357 and, 312 independence against, 134, 135–8, conspiracy doctrine strained for, 140, 142 75, 80n27, 81, 140–1, 165 inference of, 87–9, 142, 145, 146, conspiracy statute for, 77–8 156, 157, 157n26, 169 Cournot and Bertrand models on, informal agreement of, 139 83–5 innocent acts of, 139 inferring conspiracy and, 87–9, 165 interdependence and, 81–2, 87 interdependence theory and, 76–7, intraenterprise, 74, 78–80 81–2, 86, 87 irrelevance of harm for, 28, 75 intraenterprise conspiracy and, 74, market power for, 29, 29n5, 111, 78–80 143 introduction/deﬁnition of, 73–5 Parker and no, 367 nonexplicit agreement and, 140, (three) proof necessary for, 28, 75, 141, 145 139, 149 oligopoly power, 82, 86 restraint of trade and criminal, 31, parallel behavior, independence 53–4 and, 81 shared information for, 134–5, 136, perfect competition and, 81 146, 147, 148–50

Index 387

Sherman Act and, 27–9, 31, 35, undercutting of prices effect on, 35n29, 37, 75, 78, 79, 132, 133, 212–13, 221 140, 167 vertical merger serving of, 334 states and, 354–5 wealth, monopoly, society and, unilateral conduct for, 29 12–13, 20, 44 consumer(s) welfare/protection of, 40–2, 43–4, antitrust standing of almost, 61 51, 55, 171, 172–3, 175–6, 192–3, Clayton Act protection of, 320, 200, 208–9, 211, 257, 268, 271–2, 349–50 311, 317, 330–2, 345–6, 349–50, comparison shopping and, 298, 376 300, 301, 309 wholesalers direct to, 133, 167 cost-reducing facility and, 208 Continental T.V. v. GTE Sylvania, 120, gross loss to, 49 128, 129, 166, 172, 184, 185, leasing and lock-in of, 197–8, 344 264–7, 274–8, 288–9, 298, 300 low retail for, 262 contracts marginal and inframarginal, 3 competition-limiting, 264 monopolist and, 12 exclusivity, 247 monopoly overcharge suffered by, illegal, 100 61–2 long-term, 234, 343 monopoly punishment and awards opportunism and long-term, 23–4 to, 44–7, 49, 58–9, 58n32 rejection of unilateral, 140–3 most favored, 159 rule of reason for disputes of, 317 perfect competition and, 334 transaction, 342–3 perfect information and, 5 tying and exclusive dealing, 30 potential competition theory and, unilateral, 87, 138–40, 158 345–6, 349–50 wheeling, 211–12, 280, 281, 282 predatory pricing and informed, convictions, false, 130–1, 171 224 attempt at monopolization and, price increase and switching of, 251 233–4 bright line rules and, 220–1 price-responsiveness of, 238–9 competition, monopoly and, 189, product durability and, 242 191–2 responding to tastes of, 20, 41 predatory practices and, 213–15, selling to, 3, 4n2 217, 218, 219–20 sophisticated, 151 cooperative, 181–2, 204 supply, demand and, 2–3, 2n1 Copperweld Corp.v.Independence surplus, 3, 4n2 Tube Corp., 28n4, 79–80, 265–6 trusts versus, 38 copyright, 20, 120, 121, 125, 172, 261, tying and, 280, 282, 283–4, 291, 298, 289 300, 301, 308, 309–10 core theory, 115–16

388 Index

corporation, 94 per-se standards of, xiv, xv, 80n27 subsidiary relationship to, 79–80 price regulation by, 82 cost(s) summary judgment of, 141–2, average, 16–17, 21, 46, 94, 97, 150, 141n26, 173, 177, 219, 274, 306, 214, 217, 220–1, 222, 292 348 declining, 215, 292 “validity crisis” of, xiv, 98–9 defraying operating, 217n65 Craswell, Richard, 282 of error, xv credit, 296, 296n44 high-fixed, 16, 94–5, 115, 292 Criminal Fines Improvement Act, 49 marginal, 16–17, 22, 46, 94–5, criminal violations 163–4, 214, 217, 220–1, 235, 322 imprisonment and, 49, 49n7, 51–3 monopoly rents into, 14 mental state, specific intent and, opportunity, 18 53, 54–5 pricing and, 94–6 previous, 54 products related to, 11, 44 restraint of trade and, 31, 35, switching, 300 35n29, 37, 53, 111–12 transaction, 22–4, 282, 334, 341–4 cross-hauling, 162 undercutting (below), 212–13, 216, customer, most favored, 159 217, 219, 220–1 cost curve damages marginal versus average, 16–17, 21, for actual injury, 61–2 46, 220–1 decoupling proposal of, 60 U-shaped long run average, 11–12 optimal, 61n38 cost-reducing facility, 180, 207, 208, treble, 49, 58–60, 64–7 210 damages. See also consumers; fines cost-reducing merger, 315, 330 dangerous probability of success, Cournot, Augustin, 22, 76, 83–5, 174, 244–5, 246, 248–51, 250n18, 263 236 Darcy v.Allen (The Case of court(s) Monopolies), 36–7 administrative concerns of, xiii–xiv data dissemination, 144–54 appeals, 48 association, 146–9, 177–80, 204 derivative immunity narrower in, average cost, 150 359 and inflation, 151 economic reasonableness not interference of, 152–3 assessed by, xiii–xiv market price found from, 151–2 errors of, 130–1, 171, 189, 191–2, monitoring of, 153–4, 170 213–15, 217, 219, 251, 375–7 per-se rule and, 144–5, 148–9, legislative process, immunity and, 152–3, 154 357–69 rule of reason and, 144–5, 148–9 opinion, xi deadweight loss, 12–13, 15, 18–19, 333

Index 389

efficiency with gain greater than, Dr.Miles Medical Co.v.John D.Park 315, 330–2 & Sons Co., 254–8, 261, 267, optimal fine, monopoly transfer 268, 272–8 and, 44–7, 46n5 Du Pont, 232 welfare gain exceeds, 316, 330–2 du Pont (Titanium), 221n69 deal du Pont (Ethyl) v.FTC, 158–9 duty to, 270–1 duality, for conspiracy, 28, 28n4, 75, 79 right/refusal to, 187, 246–8, 246n7, duopoly model, 22, 76, 83–4, 84n37 263–4, 270, 271, 272 Dyer’s Case, The,33 dealer agency versus independent, 268–9 Easterbrook, Judge Frank, 216–17, dealership agreement and, 256, 226, 226n76 260, 264 Eastern Railroad Presidents free-riding prevention by price- Conference v.Noerr Motor cutting, 258–9 Freight, Inc., 353–66, 353n7, local demand and, 257 368–9, 375–7 long-term arrangements or vertical Eastern States Retail Lumber Dealers’ integration of, 270–1 Assn v.United States, 133, termination of, 270–1, 272–3, 275–6 166–8, 178, 246 demand, 5, 15, 24, 46, 163, 189 Eastman Kodak v.Image Technicolor cross-elasticity of, 238–9 Services, 299, 309–10 elasticity of, 10, 20–1, 315 economic profit point elasticity of, 238, 316 definition of, 9 supply and, 2, 2n1, 7–8 entry and exit with, 9–10 demand-side substitution, 236, 248, zero, 9–10 300, 338 economics, xi, xii Demsetz, Harold, 16 conscious parallelism and, 21–2 derivative immunity, 354–5, 358 definitions for, 1–9 judicial process for, 359 econometrics of monopoly legislature and, 359 transfer and, 46–7 limits to, 362–3 information, 24–6 quasi-legislative (private and its limits as useful theory of association) not for, 362 antitrust law, 189, 214, 277–8 sham exception to, 355, 356–7, perfect competition vs. monopoly 360 and, 9–21 valid governmental action of, 356 reasonableness concept for, xiii–xiv dissipation, ex ante rent, 14 transaction cost, 22–4 dominant strategy, 69, 69n2, 96, 135, economies of scale 160, 196, 221, 306 mergers for, 312, 320–1, 336 Douglas, Justice, 180 tying for, 287, 288–90, 291

390 Index

Eddy, Arthur Jerome, 146 equity proceedings for, 55–7 efficiency fairness of, 52–5 boycotts and defenses of, 176 fine/penalties (as optimal) for, conglomerate mergers and, 347 44–7, 49–52, 64 deadweight loss gain and gain of, horizontal mergers guidelines for, 315, 330–2 328–30 horizontal mergers using defenses imprisonment, criminal violations of, 315–17, 341, 344 and, 49, 49n7, 51–3 from information, 151 information sharing and, 148 of long-run competitive optimal theory of, 43–7 equilibrium, 12 per-se standards of, xiv, xv monopolization and, 190, 192, 193, private antitrust suits for, 57–64 194, 196–7, 202, 204–5, 212, 245 reasonableness of defendant’s tying and, 283–4, 287, 288–9, 292, conduct, punishment and, 50–3 294–5 reasonableness of test and burden vertical mergers and, 334, 340, 341, to, xiii–xiv, 311, 317, 341 344 reduction of, 173 elasticity social welfare and, 172–3, 175–6, demand and cross, 238–9 311, 376 demand and point, 238, 316 specific intent and, 53, 54–5 (infinite) demand of, 10, 20–1, 315 specificity desirable for, 52, 54 fringe supply, 236 treble damages for, 49, 58–60, 64–7 market demand, 235–6, 238–9 underdeterrence vs. employees, antitrust standing of overdeterrence of, 43, 51, 59–60, almost, 61 130 employment engrossing, 32, 32n18, 32n20 antitrust standing and loss of, 61–2 entry protection from competition and advertising as barrier to, 347 small business, 40, 40n43 artificial barrier to, 15–16, 189, 190, enforcement 191, 193, 196–201, 198, 281, 303, cartel, 70–1, 87–8, 136, 146, 337 309, 329, 335, 336, 340–1, 347, inference of agreement and 349, 350, 352 evidence of, 86–8, 147 conglomerate mergers and, 345, enforcement (agencies) 346, 347–8, 349, 350 agency enforcers of, 47–9 easy, 22, 36, 103, 224, 236, 267n41, apprehension probability, fines 329, 348 and, 50 exclusion of, 57, 303 civil prosecution from, 48–9, 52 exit and, 9–10 conglomerate mergers and, 350–1 geographically remote rivals early, 18n13 constraint on, 316–17

Index 391

government (state), 352–3 demand-increasing facility for, 207, independent (de novo), 345, 346, 208, 210 348, 349, 350 discouraging development of, innovation-profit, 19–20 209–10 leasing and, 198 doctrine, 207–11 limit pricing and, 221–2 economic rent for, 209 mergers and, 329, 335, 336, 340–1 rival-cost-increasing facility for, monopoly, 15–16, 190, 191, 216 210 natural barrier to, 16 types of, 207–8 penalty provision in leaving and, ethical concerns 200–1, 201n35 price-fixing and, 123–4 potential, 348 evidence, 89, 134, 135, 141, 155–7, potential competition theory and 267n41. See also intent alternatives to, 345, 346, 347–8 analysis of, 155–8, 169 price-fixing and new, 97 circumstantial, 73, 133, 139, 141–2, profits and, 12, 37 146 supply-side substitution, 234, clear (objective), 214, 215, 245, 338 250, 274, 300 toehold, 349, 350 competitive (culture), 322, 324 two level hurdle to, 199–200, 303, historical, 239, 293, 294 341 inconclusive, 158, 275 tying and, 281, 303, 309 inconsistency with, 204 United Shoe and barriers to, of specific intent, 192, 247 196–201 of unfair tactics, 247 equilibrium exclusion, 57, 78, 173–4, 177, 180, competitive, 9, 21, 83–5, 150 181–2, 195, 196, 214–15, 247 Cournot, 83–5 exclusive dealing joint-profit maximizing, 83, 135 Clayton Act application to, 303 long run, 9–12 entry barrier with, 303 market, 2–3, 5 law for, 303–7 price, 3, 10, 46n5, 77, 174 market power and, 305 Stackelberg leader outcome, 83–5 per-se rule for, 303 unilateral/structurally determined rule of reason for, 305–6 outcome for, 85 tying v., 304–5, 304n60 equity proceedings, 55–7 vertical mergers similar to, 333, 340 essential facility exclusive dealing. See also tying and cases, 57, 202–6 exclusive dealing consumer welfare and, 208–9, 211 exemptions, 91–2, 92n4. See also cost-reducing facility for, 207, 208, immunity 210 exit, entry and, 9–10

392 Index

facilitating mechanisms Federal Trade Commission v.Ticor basing point pricing, economics Title Insurance Company, and, 160–4 372–4, 377 basing point pricing, related federalism, 353, 367, 368, 373–4 practices and, 154–60 benefits to, 371–2 data dissemination and, 144–54 fine(s) per-se rule and, 144–5, 148–9, Criminal Fines Improvement Act 152–3 and, 49 retail price maintenance as, 253 maximum v. optimal, 49–50 rule of reason and, 144–5, 148–9 optimal, 44–7, 58, 58n32, 64–7 fair-minded compared to specific private damages v. optimal, 58–9, intent compared to reasonable, 58n32 52–3 Sherman Act, 27n1, 43n1 Fashion Originators’ Guild of state’s cost of, 47 America v.FTC (FOGA), fine(s). See also punishment 170–2, 181, 182, 183, 184 First Amendment, 355, 360, 364, 365, Faulkner Advertising Assoc., Inc. v. 365n24, 377 Nissan Motor Corp., 295n42 Fisher, Frank, xvi FCC, 206 f.o.b. prices Federal Trade Commission (FTC) inference of conspiracy and refusal Act of, 39–40 for, 156, 161–2 Bureaus of, 48, 50n10 FOGA.See Fashion Originators’ business review (merger) letter of, Guild of America v.FTC 57 (FOGA), 170–2, 181 limit pricing and, 221n69 foreclosure, 23–4 preliminary injunction of, 55 degree of, 338–40 prosecuting violations of insignificant, 340 Clayton/FTC Act by, 39–40, 47, lock ups for, 335 48–9, 155, 158, 170–1, 183, mergers and, 311–12, 319, 325–6, 306–7, 320, 364 327, 335, 337–40 Federal Trade Commission v.Brown tying and, 286–7, 303, 304, 305–7 Shoe Co., 306–7, 335 forestalling, 32, 32n18, 32n20 Federal Trade Commission v.Cement Fortas, Justice, 153 Institute, 155–8 Fortner II.See United States Steel Federal Trade Commission v.Indiana Corp.v.Fortner Enterprises (II) Federation of Dentists, 182–4, Fowle v.Park, 254 267 franchise, free-riding, 284n11, 288 Federal Trade Commission v.Proctor free trade, 4, 41–2 & Gamble Co.(Clorox), 344–8, freedom, individual, 168, 178–9, 181 351 free-riding, 209

Index 393

franchise, 284n11, 288 Haddock, David, 162, 164–5 predatory pricing and, 213, 227 Hand, Learned, 189, 190–3, 194, 195, resale price maintenance (RPM) 218, 223, 239–43 and, 258–9 Hanover Shoe rule, 63 state, 371 Harberger, Arnold, 18 freight absorption, and basing point harm pricing, 162 anticompetitive, 178 FTC. See Federal Trade Commission conspiracy doctrine and (FTC) irrelevance of, 28, 75 FTC v.Superior Court Trail Lawyers no public, 173–4 Ass’n, 363–6, 369 social, 175–6, 184, 249, 345–6 Hearn v.Griffin, 101n20 Gamco, Inc.v.Providence Fruit & Herriman v.Menzies , 101n20 Produce Bldg., 207 Hirschman-Herfindahl index (HHI), game theory, 75 328–30, 341, 350–1 interdependence theory and, 76–7 Holmes, Oliver Wendell, 105, 148, predatory pricing and, 225–6 150, 224–45, 256, 258 Prisoner’s Dilemma and, 68–9, horizon problem, and argument for 68n1. See also dominant tying, 287 strategy horizontal mergers geographic market, relevant, 320–2, acquiring above average firms in, 323, 344 313–14 Goldfarb v.Virginia State Bar, 123–4 business reasons for, 311–12, 320 goodwill defense, and tying, 286, 287, and competitive culture evidence, 288, 292–5 322, 324 government. See also regulation; state concentration issue for, 311–12, derivative immunity and, 354–6, 319–25, 327 357, 358, 359 definition of, 311 entry barriers of, 352–3 for diversification, 313 explicit authorization of, 353 economic reasonableness and, immunity to Sherman Act from 326 action of, 354 for economy of scale, 312, 320–1 irrelevance of influencing of, 356 efficiency defenses for, 315–17, legislative versus judicial processes 340, 344 for action of, 357–9, 376 entry into new market by, 323 rate-making bureaus of, 353, 372– failing company defense for, 320, 4 327 unethical conspiracy to bar others foreclosure (on competition) by, access to, 357, 363, 368 311–12, 319, 325–6, 327 Grady, Mark, 114 (merger) guidelines for, 328–30

394 Index

horizontal mergers (cont.) exceptions to Parker doctrine of, incipiency doctrine high point and, 366–7 325–6 influence on valid governmental incipiency doctrine, mergers in action for, 356, 362–3 concentrated markets and, liberal approach to, 372 321–5 municipalities and, 375 incipiency doctrine rejection of, from nature of acts, 354 326–8, 340 Noerr doctrine of, 354–69 law, 317–30 Parker doctrine of, 356, 358, 362, managerial goals for, 313 366, 367–9, 371–5 mitigating factors for, 320 procedural invalidity as exception monopoly power and, 312, 316 to, 366–8, 369, 377 reasons for, 311–17 sham exception of, 355, 356–7, 360, rule of reason, incipiency doctrine 366, 369 and, 318–21 source of, 356 sales/profits following, 314–15 valid governmental action for, 356, small market share, violation of 362–3, 366, 368 Clayton and, 319–20 incentives, 10, 20, 118, 142, 181, 198, for smaller companies (to compete 240, 273 with larger ones), 320, 323 hold-up litigation and, 56 social welfare versus, 311, 317 information and, 5 welfare tradeoffs of, 315–17, 330–2 leasing need of, 197–8, 199 horizontal restraints, 128, 266–7 incipiency doctrine, 348 hornbook, xi–xii definition of, 319–20 theoretical, xii high point of, 325–6 horizontal mergers in IBM v.United States, 286, 287, 292 concentrated markets and, illegality 321–5 per-se, 80n27, 90, 104, 107, 112, rejection of, 326–8, 340 116, 118, 133, 152, 171, 269, 276, rule of reason, horizontal mergers 295, 340 and, 318–21 Illinois Brick rule, 63 vertical mergers and, 339–40 immunity, (state), 353–4. See also independence, as factor in inferring derivative immunity; sham agreement, 134, 135–8, 140, exception 142 as attractive nuisance, 374 independent goods, and tying, 280 derivative, 354–6, 357, 358, 359 independent versus unilateral error costs and, 375–7 conduct, 136–7 exceptions to Noerr doctrine of, individual arrangements, 121, 128 366–7, 369, 377 inference doctrine, 133–40

Index 395

inflation, and data dissemination specific, 53, 54–5, 187, 192, 193, plans, 151 194–5, 205, 207, 228–9, 245, 246, information, 21. See also data 247–51, 248, 248n15, 302, 366 dissemination specific versus general, 193n18 current prices and, 146, 147, 154 subjective evidence of, 371 economics, 24–6 subjective versus objective efficiency from, 151 evidence of, 192, 215, 219 imperfect, 24, 300 as substitute to evidence of market inferring agreement and shared, power, 250 133, 134–5, 136, 146–7, 148–50, interdependence theory, 22, 76–7, 168, 170, 178, 184 81–2, 86, 87 interference with market of interest groups, 38, 38n37, 39 shared, 152–3 interlocking directorates, 30 market, 149–51, 298 International Business Machines Corp network from, 234 v.United States, 26n28 perfect, 5–6, 24 International Salt Co.v.United States, privately held, 5n4 286–92, 303–4 as public good, 5 International Shoe Co.v.FTC, 318n24 resale price maintenance and Interstate Circuit v. United States, 77, charge for, 260 133–8, 137n10, 141, 158 theory, 309 interstate commerce, 29, 91n1, 290 tying and lack of, 282, 298 Interstate Commerce Commission injunction, preliminary, 55–6 (ICC), 91–2, 97–8 injury intrabrand competition, 120, 178, actual, 61–2 178n18, 180, 266, 267, 288 antitrust, 218–19 invalidity, per se, 103 derived, 62–3 passing on problem and, 63 Jefferson Parish Hospital No.2 v. speculative components of, 61 Hyde, 297–301, 309–10 innovation, 41, 114 joint ventures, 119 profits from, 19–20 judges, preliminary injunctions and, spill over benefits from, 20 56 insurance, 123–5, 123n19, 123n20, jurisdiction, 29–30 372–3 Justice Department adverse selection in, 5–6 Antitrust Division enforcement of, intent 47–8, 49n7, 97–8 bright line versus Ninth Circuit Conglomerate Merger Guidelines, predation test of, 215 350–1 clear evidence versus, 214–15 guidelines of Antitrust Division of, nonspecific, 195, 204–5 48, 53, 239, 243

396 Index

Justice Department (cont.) quality of product versus source Merger Guidelines, 232, 233, 234, for, 286–7 239, 324–5, 328, 337n12, 338, return fees for, 199 340–1 short-term versus long-term interest (horizon problem) in, Kaplow, Louis, xii, 248n15 287 Kiefer-Stewart Co.v.Joseph E. tying and, 285–7, 289–90 Seagram & Sons, 117, 123n17 legal error, as justification for public King v.Journey-men Taylors of harm requirement, 176, 251. See Cambridge, 35n29 also convictions, false kinked demand curve, and basing legal evolution, xiii point pricing, 163 legislative process, immunity and, Klor’s paradox, 30, 174–7 357–69, 376 Klor’s v.Broadway-Hale Stores, 173, nonconspiracy for, 368 183, 184 quasi-, 361–2 Kozinski, Judge, 194 lemons problem, 24–5, 198n29 Lerner index, 235–7, 236n11, 241 Lafayette v.Louisiana Power & Light Lessig v.Tidewater Oil Co., 248, 250 Co., 375 Letwin, William, 36 Landes, William, 44, 235–6 leveraging lawsuit(s) with conglomerate mergers, 347 actual injury and, 61–2 debate on, 211–12 and attorneys’ fees, 58 definition of, 202 bad faith, 59 double counting monopoly power Clayton Act reason for, 30, 48–9, of, 196, 211 52 essential facility and, 202–6 governmental, 55–7, 102–3 Griffith and theory of, 195–6 hold-up litigation, 56 limits to, 203 by Justice Department and FTC, tying with, 279–80, 285, 296 47, 48–9, 52 liability optimal fines and, 46 erroneous or false, 130, 213–14, private, 57–64, 102–3 228 sham, 271, 369–71 essential facility doctrine and, 207 standing doctrine for, 50–64 intraenterprise conspiracy and, 79 treble damages of, 49, 58–60, 64–7 marginal, 51, 66 Leasco.See Response of Carolina, monopolization and specific intent, Inc.v.Leasco Response, Inc. 195–6, 228 leasing, 197–9, 343 per-se (strict), 50, 51 barrier to entry for, 198 private, 52 incentive problems for, 197–8, 199 licensee, 114, 255

Index 397

licenses, 140–1 irrelevance of deﬁnition of blanket, 120, 121 relevant, 236 patent, 255–6, 261, 285 monopoly of, 102, 322, 324, 329 per use, 120, 121 multi-, 239–43 trade secret, 254 opportunism offset by concessions limit pricing, 221–3 in, 23 lock in, 197–8, 344 price, 76, 83, 108, 150, 151–2, 290, Lorain Journal Co.v.United States, 296 245–7, 250, 272 quantity, 174–5 loss leader, 217n64 relevant, 218, 230–1, 233, 236, 237–43, 248, 249, 250, 292, 306, manufacturer(s) 325, 336–7, 338n15 agency versus independent dealer relevant geographic, 320–2, 323 and, 268–9 relevant product, 324, 338 compliance, vertical restraints and, secondary, 240–3 273 self-correction of, 352 dealer long-term arrangements or share, 55, 72, 218, 230–1, 235–6, 243, vertical integration with, 270–1 249, 318n25, 319–20, 325, 329 retaining of title by, 267–70 small proportion of, 111 termination of dealer by, 270–1, unconcentrated, 323 272–3, 275–6 market behavior vertical, 257–8, 268 perfect competition not in, 26 manufacturer(s). See also resale price market demand, elasticity, 235–6, maintenance 238–9 Maple Flooring Manufactures Assn.v. market equilibrium, 2–3, 5 United States, 149–54 market power, 129, 179, 182, 187, 188, Maricopa.See Arizona v.Maricopa 207, 215, 230–43, 324. See also County Medical Society monopoly power market. See also entry conspiracy and, 29, 29n5, 111, 143 concentration, 320–5, 327 dangerous probability of success contestable, 224 and, 248, 263 contribution to wealth, 3–4, 4n2 equipment versus parts control of, Cournot competition and direct 300, 301 and indirect output effect on, exclusive dealing and, 305 83 exclusivity (geographic) agreement demand, 174 and, 263 false convictions constraining, 214 guidelines for, 218, 243, 249, inelastic, 153 318n25 information, 149–51, 298 in relevant market, 250 interference, 31, 32–3 rule of reason and, 183

398 Index

market power (cont.) active or nonpassive acquisition specific intent and, 248, 249 standard test of, 190–1, 195, tying and, 279, 282, 282n8, 286, 290– 196, 201–2 1, 292, 296, 297–8, 300, 308, 309 Alcoa and, 189–93, 201 marketing, joint agreement for, 203–4, conduct-focused test of, 187, 188, 205 188n13, 193 Marshall, Justice, 153–4 double counting monopoly power Masten, Scott, 200 and, 21, 196 Matsushita Electric Industrial Co.v. efficiency, (superiority) and, 190, Zenith Radio Corp., 142–3, 192, 193, 194, 196–7, 202, 204–5, 216–17, 219, 228, 348 212, 245 McCarran-Ferguson Act, 92, 373 essential facility cases, leveraging McLean Trucking v.United States,91 and, 202–6 mercantilism, 4 essential facility doctrine and, mergers. See also conglomerate 207–11 mergers; horizontal mergers; exclusionary manner of, 195, 196, vertical mergers 214–15, 247 attempt to monopolize and, 245 Griffith test, 201–2, 212 competition and, 56–7, 57n29, 95 intent of, 187, 188, 192, 193, 194–5, concentration issue for, 311–12, 204–5, 207, 215, 217, 228–9 319–20, 321–5, 327, 339 legal versus illegal, 188, 190–1, 194 FTC business review letter for, 57 leveraging debate for, 196, 211–12 monopoly from, 30 lower price in, 200–1, 242 noncompeting manufacturers for, not unconscious of its doing, 245 194–5 preliminary injunctions and, 55–6 from patent, 189–90 punishment for, 50, 51, 54 post-Alcoa and, 194–202 relevant market and, 306, 325, predation theory and, 219–29 336–7, 338n15 predatory pricing cases and, Missouri v.National Organizational 212–19 for Women (NOW), 359–60, preemptive capacity (of plant) 364–6 investment in, 223 Mitchel v.Reynolds, 33–4, 92, 98, 101, rival-cost-increasing (RCI) facility 101n21, 103, 127–8, 264 for, 208, 210 mobility Sherman Act section 2 doctrine perfection competition and, 6–7 development against, 186–202 monopolization. See also attempt, at specific theory of liability of, 195–6 monopolization; tying structure-focused test of, 193 abuse theory of, 187–8, 190, 193, subjective versus objective intent 194, 196, 246 of, 192, 215, 219, 229

Index 399

tests for, 190–3, 194 sources of waste from, 19, 19n16 willful acquisition of, 202 stability of, 15–18 monopoly. See also abusive business successive pricing, 334 acquisition process for, 19 supplier, 167 basics of, 12–15, 37 surcharge, 235 bilateral, 23, 342 tending towards, 171 common law of, 31, 35–7 wealth, customer, society and, corporate mergers tending 12–13, 20, 44 towards, 30 monopoly power, 82, 170–1, 178, 188, deadweight loss (large/small) of, 196, 202, 204, 211, 247 12–13, 18–19, 330–2 attempt at monopolization, market definition of, 1 share and, 248–9 entry, 15–16, 190, 191, 216 Cellophane case and relevant, 232, ex ante rent dissipation, 14, 18 237–9 expanding output of, 15 (non)constraints on pricing for, inadequacies of criticism of, 19–21 232–4 incumbent, 222–3, 227 cross-elasticity of demand and, of market, 102 238–9 markets, 82 determinants of, 231, 235–7 markup, 334 fringe supply elasticity (supply- natural, 16–17, 249, 250, 250n18 side substitution) and, 236 no duty to subsidize rival by, 206 guidelines for, 218, 243, 249 optimal fines, deadweight loss and Lerner index for, 235–7, 236n11, transfer, 44–7, 49 241 positive economic profits for, 231 market demand elasticity (demand- price, 62, 83, 85, 196, 201, 322 side substitution) of, 235–6 price discriminating by, 14–15, 196, market share for, 230–1, 235–6 282–3, 289 maximizing profit with, 235 price setting (fixing) of, 4, 194, measuring of, 230–4 195 from mergers, 312, 316 profits, 12, 18, 57, 231–2, 271, 281, multimarket monopoly, Alcoa and 308, 309, 352 relevant, 239–43 punishment, consumer and, 44–7, price increase and, 233–4, 241 49 product durability and, 242 relevant market, Alcoa and profit margins for, 231–2 multimarket, 239–43 restraining production with, rents, 121, 211, 280 240–1 short run, 20 secondary market and, 240–3 single seller for, 1, 4 tying and, 279, 281, 282, 285, 291–2, size not rule for, 188, 190 297, 299, 309

400 Index

Monsanto Co.v.Spray-Rite Service industry (market) of, 21, 152–3, Corp., 274–6, 277 154, 158 Montgomery County Association of power v. prices of, 82, 86, 236 Realtors, Inc.v.Realty Photo Olympic Equip. Leasing Co. v. Master Corp., 295n42 Western Union Tel. Co., 206 Motion Picture Patents Co.v. Ontario Salt Co.v.Merchants Salt Universal Film Manufacturing Co., 101n20 Co., 285 opportunism, bargaining, 343 municipalities, 375 Ordover, Janusz, 236–7, 322 organized crime, and cartels, 71 Nash v.United States, 31, 52–3, 78, 88 Otter Tail Power Co.v.United States, National Collegiate Athletic 202–3, 211–12, 279–81, 282 Association (NCAA) v. output, 189, 191, 215 University of Oklahoma, 128–9, restraining, 240–1 182, 183, 246n6, 267 ownership, common, 79 National Society of Professional Engineers v.United States, Pacific Engineering & Production Co. 125–8, 127n25, 129, 183–4 v.Kerr-McGee Corp., 217n65 NCAAP v.Claibourn Hardware Co., Palmer v.BRG of Georgia, 267 360 parallel pricing, 75, 77, 82, 322 negative option, 373 parallelism. See also conscious negligence, 53, 59, 78n21, 105 parallelism noncompete agreements, 33–4, 100, “plus” something, 141, 145 103, 257, 264 Paramount Famous Lasky Corp.v. Northern Pacific Railway Co.v. United States, 168–9 United States, 290–4, 296–7, 299, Parker v.Brown, 353, 354, 356, 358, 301, 305 362, 366, 367–9, 371–7 Northern Securities Company v. partnerships, 94 United States, 317 passing on, 63 Northwest Wholesale Stationers v. patent(s), 20, 36–7, 297 Pacific Stationary & Printing licenses, 255–6, 261, 285 Co., 181, 182, 183, 187, 207, 264 resale price maintenance and, NOW.See Missouri v.National 254–6, 261, 261n17 Organizational for Women tying in with, 284–95 (NOW) Peckham, Justice, 92, 171 penalty provision, 200–1, 201n35 O’Connor, Justice, 298 penalty. See fines oligopoly, 74–5, 136–7, 152–3, 176 per-se rule, 80n27 bilateral, 160 for agency relationship, 269 consciously parallel, 82, 86 basing point pricing not, 164

Index 401

blanket license arrangement and, public service exceptions to, 123 120–1 reduction of administrative costs boycotts, post-BMI/Sylvania and, by, 122 181–2, 184–5 for refusals to deal, 270, 271, 272 boycotts, post-Socony and, 166, resale price agreements, retail 171, 173, 177, 179–80 networks and, 269 boycotts, pre-Socony and, 169– rule of reason versus, 129–31, 70 295–301 conglomerate mergers not with, self regulation, securities industry 349 and, 181, 182 data dissemination, oligopolistic Sherman Act and, 117, 120, 326 industry and, 144–5, 148–9, standard of proof for (Dr.Miles ), 152–3, 154 274, 275 delivered pricing plans not, 158–9, termination and, 276, 277 164 trade restraints and, 317 enforcement and, xiv, xv tying and standard of, 286–90, 297, exceptions to price fixing and, 302 122–3, 126 tying, International Salt and, for exclusive dealing, 303, 304 286–90 facilitating mechanisms and, tying, Jerrold, goodwill defense 144–5, 148–9, 152–3 and, 287, 292–5 First Amendment exception, price tying, rule of reason and, 295–301 fixing and, 364, 365 unreasonableness, 294 for foreclosure on competitors, per use license, 121 286–7 Peterman, John, 289 goodwill defense, tying and, 287, plaintiff 292–5 informed, 53–4, 66–7 hybrid of rule of reason and, 166, uninformed, 65–6 181 PNB.See United States v.Philadelphia illegality, 80n27, 90, 104, 107, 112, National Bank (PNB) 116, 118, 133, 152, 171, 269, 271, Posner, Judge Richard A., 74, 85–7, 295, 340 151–2, 165, 198n30, 206, 235–6 interbrand competition as not, 120 potential competition theory and its utilitarian justification, 116, actual potential competition and, 117–25, 131 345 mergers and, 317, 340 consumer benefit and, 345–6, nonburden of inferring conspiracy 349–50 under, 144–5, 150 duty-to-rescue rule for, 346 for price fixing, 104, 107, 112, 116, enforcement, reduction of 117–19, 122, 133 competition and, 346

402 Index

potential competition theory (cont.) conglomerate mergers for, 347 entry alternatives and, 345, 346, cost-price comparison rule in, 215, 347–8 219 expansion of, 348–9 costs/pricing examined in, 217 fiercer competition with, 345 counterstrategies against, 223–4 limitations of, 345–6 difficulty for, 224 potential competition benefit and, easy entry and, 224 345 free-riding of rival in, 213, 227 power intent examined in, 217 bargaining, 342–3 limit pricing and, 221–3 market, 129, 179, 182, 187, 188, 207, objective reasonableness test for, 215, 230–43, 263, 279, 282, 216–18, 219 282n8, 286, 290–1, 292, 296, parasitic versus classical, 227 297–8, 300, 305, 308, 309, 324 price cutting as, 214–15, 216, 219, measuring, 243 221, 221n69 monopoly, 82, 170–1, 178, 188, 196, recoupment from, 213, 216, 219, 202, 204, 211, 218, 230–43, 247, 221n68, 224–5, 227, 228–9 279, 281, 282, 291–2, 295, 297, reputation’s benefit for, 224–6 299, 309 theory, 219–29 oligopoly, 82, 86 uncertainty and, 223–4 tying and sufficient economic, 292, undercutting costs by, 212–13, 216 296–7, 300–1 price (pricing). See also basing point predatory pricing, 70–1, 142, 155, 212, pricing 228–9, 250n18 as average cost under perfect alternative theory of, 226–8 competition, 10 Areeda and Turner analysis of, average level, 152 220–1 base-point, 81 bright line rule and, 215, 220–1 competitive, 3, 62, 77, 150–1, 191, bright line versus Ninth Circuit 201n35, 282, 308 intent in, 215 competitive bidding and, 125–7 campaign of, 213, 216, 224–5, 227, costs and, 94–6, 220–1 229 cutting (competition), 95, 115, 150, cases, 213–19 153, 157, 157n26, 212–14, 215, chain-store paradox and, 225–6, 220–1, 242, 274, 276, 281 226n76 cutting (termination), 274, 276–7 clear evidence versus intent of, delivered, 158–9, 161–2 214–15, 229 depressed, 108, 110 common law and, 213, 227 discrimination, 14, 26, 30, 173, 196, competitive pricing versus, 214–15, 282–3, 283n10, 289–90, 296 217–18 (new) entry and agreed, 897

Index 403

equilibrium, 3, 10, 46n5, 77, 174 desirable, 113–14 exceeding costs, 214, 216, 217 empty core problems for, 115 increase, 233–4, 241, 258–9, 259n11, ethical concerns/justifications for, 337 123–4 inflation, 151, 337 by firms controlling industry, joint-profit maximizing, 83, 85, 86, 106–7, 188 135, 136 First Amendment and, 364 leadership model, 81–2, 86, 87 (naked) horizontal, 257 life-cycle, 300 illegality/outlawing of, 22, 68, 106, limit, 221–3 107, 112, 190 maintenance, 82 manufacturer’s retail, 267–9 market, 76, 83, 108, 150, 151–2, 290, with maximum fees, 123, 124–5, 296 262 monopoly, 62, 83, 85, 196, 201, 322, with minimum fees, 123–4 334 monopoly, 4, 194, 195 nonuniformity, past of, 149–50 most favored customer and, oligopoly, 82, 86 159–60 predatory (below-cost), 70–1, 142, noncompete and, 100 155, 212–29 parallel pricing versus, 75, 77, 82, (unified) raising of, 139n17 322 regulation, 82 per-se illegality of, 104, 107, 112, (federal) regulation of, 97–8 116, 117, 118, 122, 133 restraint in, 315–16 per-se rule and, 116, 117–25 spot, 167 per-se rule and exceptions to, stability, 146, 147 122–3, 126 successive monopoly, 334 plan versus, 147–8 taker, 10, 21 price wars and agreement of, 96–7 uniform, 156–7, 158 punishment/fines, 50, 51, 53 wars, 95, 97 to reduce intrabrand then enhance price fixing. See also collusion interbrand competition, 118–19, by association, 106, 118–19, 121 122 boycotts and, 169 regulated price for, 367 cartels, 17–18, 62, 68–9, 80n27, 87, (maximum) resale, 117 107–8, 169, 253, 256, 337–8 resale price maintenance and, 253, case for, 115–16 256, 274 charge without control, 28 retailers, 253 common law and, 99–100 rule of reason, (regulation) in, definition of, 117 104–6, 117 delivered pricing system and, social harm of, 131 158–9, 161–2 term, 118

404 Index

price ﬁxing (cont.) Professional Real Estate Investors, territorial allocation schemes and, Inc.v.Columbia Pictures 118, 119, 126 Industries, 371 trade restrained as, 155 professionals, 29n7, 123–8, 183 uniformity of prices and, 156–7 proﬁts vertical maximum, 118, 218, 262, accounting, 9 262n23, 273 accounting versus economic, 231 vertical nonprice restrictions and, competitive, 315 119 concentration improving of, 312, price setting, cooperative association, 312n3 120 economic, 9–10, 12 Prisoner’s Dilemma, 68–9, 68n1, 69n2, entry and, 12, 37 76n14, 96, 135 in excess of opportunity costs for, procedural invalidity, 366–8, 369, 377 18 procompetitive theories innovation, 19–20 vertical mergers and, 333–4 margins, 231–2 producer(s) maximization, 10–11, 22, 36, 94–5, marginal and inframarginal, 3 99n17, 135, 163, 277, 280–1, 315 supply, demand and, 2–3, 2n1 mergers and, 314 surplus, 3 monopoly, 12, 18, 57, 231–2, 271, product(s) 281, 308, 309, 352 costs related to, 11, 44 short term, 10, 12, 20 differentiated, 128 promotions durability, 242 loss leader for, 217, 217n64 homogeneous, 8 protection, 129 new product criterion and, 125 market mechanism versus societal, quality, competitive bidding and, 40–2 125–7, 184 of small businesses, 40–2, 192–3, service of, 199–200, 258–9, 260–1, 320–1, 323, 339 299–301 social welfare, 40–2, 43–4, 51, 55, single tying with, 26, 297–8, 298n49 171, 172–3, 175–6, 192–3, 200, single unit versus components of, 208–9, 211, 257, 268, 271–2, 311, 293–5, 295n42 317, 330–2, 345–6, 376 substitutes for unique, 129 public choice, 37, 376 substitution of, 324 public good, 5 uniqueness of, 296–7, 299, 300 public harm, 30, 173, 249 production. See output public interest, 37–9, 376 Professional Engineers.See National publicity Society of Professional third-party technique of, 355, Engineers v.United States 359–60, 363

Index 405

punishment Reed-Bulwinkle Act, 98 apprehension likelihood and, 50 regrating, 32, 32n18 costless, 44, 44n4, 50 regulation price fixing, 50, 51, 53 conservation, 110 state’s cost for, 47 federal, 91, 97–8, 97n12, 353 state, 92, 92n4, 110 quality rent-seeking, expenditures, 13 competition restraints not due to, reputation, 26 125–7, 184 predatory pricing for, 224–6 low versus high, 24–6, 234, 259 tying for, 287–8, 292–5 res ipsa loquitur, as approach to Rahl, James, 22, 74–5, 76, 77–8, 80, 85, inferring conspiracy, 78 87–9 resale price maintenance (RPM) reasonableness. See also rule of agreement, not monopoly and, 270 reason consigning, vertical manufacturers of defendant’s conduct, and, 257–8 punishment and, 50–1, 52–3 dealers, local demand and, 257 objective, 216–18, 219 dealership agreement and, 256 proof, without price evaluation, definition of, 252–3 92–4 Dr.Miles and other cases for, 254–7 reasonableness, economic free-riding prevention by price- administrative concerns v., xiii–xv, cutting dealers and, 258–9 92, 106–7, 116, 171, 228, 311, geographical dispersion in, 259 317, 330 higher price threat and, 258–9 common law and, xiv, 92–3, information charge with, 260 98–100, 102–3, 107, 109, 112 justification of, 257–61, 276–7 defensible, xiii–xiv, 92–3, 108–9, like cartels, 253, 256 120–1 lowest price for, 247, 253 economic theory for, xv–xvi presale service and, 258–9, 260–1 mergers and, 326, 339, 344 as price-fixing conspiracy, 253 noncompetition clauses and, 100, quality and, 259 103 scope of, 261–2 objective, 191 Response of Carolina, Inc.v.Leasco purpose, power, effects of, 178 Response, Inc., 301–2 resale price maintenance and, 257 retailer. See resale price maintenance Sherman Act and, 92–4, 98–9, revenue, marginal, 22, 163–4 106–7, 109n37, 111–12 risk recoupment, and predatory pricing, compensation for taking, 231–2, 216, 229. See also 269–70, 293, 295 reasonableness, objective continuum of, 6

406 Index

Robinson-Patman Act, 47 market power and, 183 Royal Crown Co.v.The Coca-Cola merits of, 104–6, 109 Company,55 modern, 116 ruinous competition, 96–8, 99 most favored customer and, 160 high ﬁxed costs and, 94–5 per-se rule versus, 129–31, 295–301 rule of reason, 34, 53, 90, 100, 102, for private associations, 262 120. See also reasonableness; procompetitive justiﬁcations of, reasonableness, economic 124, 174, 183–4, 203–4, 246, analysis, 150, 169–70, 171, 294 246n6, 247, 291 argument against, 102–4, 106, 107, professions and, 124, 126–7, 183 109 quick look application of, 129n30 boundary pressures on, 125–9 reverse of, 294 boycotts and, 166–70, 173–4, 182, Sherman Act and, 106, 126, 291, 183, 184–5 292, 317, 326 burden of proof with, 144–5, 150, for territorial restrictions, 265–6 167, 168 trade restraints and, 317 Clayton Act and, 305, 317 tying and, 291, 292, 293, 294, 295, common law, 116 297, 299, 300, 302n57 contract disputes for, 317 tying, per-se rule and, 295–301 data dissemination and, 144–5, for vertical mergers, 333, 340–1, 148–9 344 denial of access for essential facility and, 207 sales for exclusivity agreements, 264, cartels, 107–8 305–6 pyramiding, 108 exclusivity contracts and, 247 referrals, 206 First Amendment and, 364, 365, Scalia, Justice, 301, 367, 368 365n24 Schumpeter, Joseph, 19–20 higher standards of profession Schwinn.See United States v.Arnold, and, 123 Schwinn & Co. horizontal mergers, incipiency section 2. See Sherman Act, section 2 doctrine and, 318–21 self-dealing, 337 horizontal restraints and, 128, sellers, 3 266–7 Selten, Reinhard, 225 hybrid of per-se rule and, 166, 181 service information and, 148, 149–50, 154 free provision of, 199–200 judiciary’s limited experience and, parts and, 299–301, 310 124 resale price maintenance and, least restrictive alternative not 258–9, 260–1 required by, 121 tying of, 299–301

Index 407

Service & Training Inc.v.Data interdependence and, 81 General Corp., 295n42 jurisdiction of, 29–30, 55 Sessions Tank Liners Inc.v.Joor New Sherman Act and, 132–3, 141 Manufacturing Inc., 366n22 patents and, 261 sham cases against price fixing, 22, 68, 218 judicial, 359, 361, 369, 370 public choice view for, 37, 376 legislative, 359, 361, 369 public interest view for, 37–9, 376 sham exception, 355, 356–7 as punishing conduct versus as anticompetitive weapon, 368 structure, 79, 89 business relationships of resale price maintenance violation competitor influenced in, 366, of, 256–7 369 restraint of trade and, 31, 33–4, 37, competing against each other in, 39, 91–4, 100–2, 100n20, 116, 360 290 publicity campaigns and, 360 rule of reason for, 291, 292, 317, sham lawsuits, 369–71 326 anticompetitive, 370 Sherman Act, Section 1 test for, 371 case against common law standard shareholders (stock), 314–15, 318n24 and, 101–4 Sherman Act, xiv, 17, 20 common law abandoned by, 93–4, boycotts and, 365 103–4 Clayton Act and, 47, 54 common law versus, 90–104 common law background for, 30–7 conscious parallelism and, 145 competition, market interference conspiracy and, 27–8, 78–9, 132, and, 32–3, 116, 119, 214 133, 140, 167, 170 conspiracy aspect of, 27–9, 31, 35, enforcement/penalties of, 47, 49, 35n29, 37, 75, 78, 79, 146 54, 139 debate concerning goals of, 40–1 exclusivity agreements and, 263 development of passage of, 37–9 mergers and, 317–18 exclusionary conduct and, 78, 174, per-se rule and, 117, 120, 326 214 price fixing and, 218–19 explicit federal authorization of, reasonableness and, 92–4, 98–100, 353 106–7, 109n37, 111, 317, 330 federal control without adequate ruinous competition and, 94–8, 99 state supervision and, 372 rule of reason and, 106, 126, 326 federalism and, 367 for territorial restrictions, 265, fines/enforcement for, 27n1, 43n1, 266 47, 49, 54, 74, 79, 97–8 as test for violation of section 2, immunity (from governmental 187, 187n3 action) to, 354, 354n9 tying and, 293

408 Index

Sherman Act, Section 1 (cont.) 211, 257, 268, 271–2, 311, 317, unreasonable restraint of trade 330–2, 334, 345–6, 376 and, 101–2, 290 society validity crisis and its resolution waste of wealth of, 12–13, 20, 43 for, 98–101 Socony.See United States v.Socony- Sherman Act, Section 2 Vacuum Oil Co. abuse theory and, 186–8, 190, 194, specialization 196, 247 perfect competition, cost curve Alcoa and, 188–93 and, 11 denial of access of essential facility specificity, and criminal law, 52, 54 and, 207 Spectrum Sports Inc.v.McQuillan, development of, 186–8 250–1, 263 exclusivity agreements and, 263 stability, 15–18, 115, 146, 147, 148 Griffith test for, 201–2, 212 Standard Oil Co.of California joint marketing, large firm and, (Standard Stations) v.United 204 States, 303–5, 317 monopolization attempt and, 218, Standard Oil Co.v.United States, 39, 222, 292 52, 101–2, 105, 186–8, 192, 194, post-Alcoa and, 194–202 195, 212, 246, 305 public harm and, 175–6, 184, 249 Standard Stations.See Standard Oil Section 1 as test for violation of, Co.of California (Standard 187, 187n3 Stations) v.United States specific intent for, 187, 192, 193, standing, law on, 60 194, 195, 197, 228 actual injury and, 61–2 side payments, 8. See also bribes derived injury and, 62–3 Silver vs.New York Stock Exchange, and optimal deterrence, 61–2 181, 182 proving antitrust injury and, 63–4 Simpson v.Union Oil Co., 268–9 state single product, and tying, 293–5, action antitrust immunity, 353–4 295n42, 297–8, 298n49 attractive nuisance of immunity of, single-supplier, 1 374 Smith, Adam, 4 enforcement of antitrust Snyder, Edward, 200 regulations hesitancy by, 39 social benefits, 129, 171 error costs, immunity and, 375–7 social harm federal control without adequate marginal, 51, 66 supervision of, 372 price fixing for, 131 free-riding, 371 social optimum, 3, 5 immunity, error costs and, 375–7 social welfare, 40–2, 43–4, 51, 55, 171, immunity exception as market 172–3, 175–6, 192–3, 200, 208–9, participant, 368

Index 409

immunity to Sherman Act from Sylvania.See Continental T.V.v.GTE action of, 354, 354n9 Sylvania municipalities and immunity of, 375 Taft, Judge, 99–101, 104, 112, 326 Noerr immunity and, 359–69 Tampa Electric Co.v.Nashville Coal Noerr-Pennington doctrine for, Co., 305–6, 319 353–9 tariffs, 38, 38nn36–7, 234, 237 Parker immunity doctrine for, 354, tax, 313 356, 358, 362, 366, 367–9, 371–5 for overproduction, 8 punishment and, 47 taxicab medallion, as ex ante rent rate-making bureaus of, 353, dissipation, 13 372–4 termination, 270–3, 275 sham lawsuits and, 369–71 in regards to price cutting, 276–7 third-party publicity technique territorial allocation, 118, 119, 126 against, 355, 359–60, 363 territorial restrictions, 263, 267, 289 unfair competition laws, 170 resale, 265–6 winners and losers with, 367 rule of reason for, 265–6 State Oil Company v.Khan, 117–18, textbooks 123n17, 262 economics, xi, xii, xiii state. See also immunity law, xi–xii, xiii Stigler, George, 71–3, 86, 153 Thatcher Mfg.Co.v.FTC , 318n24 Strauss v.Victor Talking Machine Co., Theatre Enterprises v.Paramount 261n19 Film Distributing Corp., 132–3, summary judgment, 141–2, 141n26, 140 173, 177, 219, 274, 306, 348 Theory of Industrial Organization, Summit Health, Ltd.v.Pinhas , 29, 184 The (Tirole), xii Summit Health v.Pinhas , 177 third-party (effects) supply, 12 perfect competition and no, 7–8 demand and, 2, 2n1, 7–8 publicity by, 355, 359–60, 363 supply-side substitution, 234, 236, 248, Ticor.See Federal Trade Commission 338 v.Ticor Title Insurance surplus Company consumer, 3 Times-Picayune case, 291 producer, 3 Tirole, Jean, xii, 75n11, 76nn13–14, total, 3 241 Swift & Co.v.United States, 244–5 toehold doctrine, 349, 350 Swift formula, 244–8 tort law, 30, 53, 58–9, 176, 213, Sykes, Alan, 236–7, 322 226–7 syllogism, of Judge Learned Hand in Town of Hallie v.City of Eau Claire, Alcoa, 190, 195 375

410 Index

trade anticompetitive theory difficulty competition and restraint of, for, 307–10, 307n66 104–5, 111, 112, 116, 118–19, Clayton Act and, 285–6 127–8, 153, 169, 170, 171, 173, collusion facilitated through, 283 177–8, 197, 290, 318, 319–20, consumers and, 280, 282, 283–4, 322, 325, 366 291, 298, 300, 301, 308, 309 free, 4, 41–2 contractual versus technological, individual freedom of, 168, 178–9, 302 181 definition for, 279 regulating, 170 early cases for, 284–6 restraint of, 31, 33–4, 39, 80, 91–4, economies of scale defense for, 100, 100n20, 129, 133, 155, 317 287, 288–90, 291 states and restraint of, 354 efficiency and other constraints unreasonable restraint of, 39, 53, with, 283–4, 287, 288–9, 292, 101–2 294–5 trade secrets, 254 entry deterrence of, 281, 303, 309 Trail Lawyers.See FTC v.Superior exclusive dealing versus, 304–5, Court Trail Lawyers Ass’n 304n60 transaction costs forcing of, 298 economics, 22–4 franchise problem, 284n11, 288 models, 334 goodwill defense and, 287, 288, tying, 282 292–5 types of, 342 horizon problem, 287–8 vertical mergers and, 334, 341–4 information costs and, 300 transaction-specific assets, 342 leasing and, 285–6, 289–90 transportation. See basing point leverage for, 279–80, 285, 296 pricing market/monopoly power and, 279, treble damages, 49, 58–60 281, 282, 282n8, 285, 286, 290–2, optimality of, 64–7 296, 297–8, 299, 300, 308, 309 plaintiff informed and, 66–7 per-se rule, International Salt and, plaintiff uninformed and, 65–6 286–90 trusts, 38 per-se rule, Jerrold, goodwill Tullock, Gordon, 18, 80–3, 85 defense and, 287, 292–5 Turner, Donald F., 74, 80–3, 85, 87–9, per-se rule standard for, 290–2, 136n9, 165, 220–1 297, 302 tying, 26 price discrimination for, 282–3, anticompetitive theory, after 283n10, 289–90, 296 Chicago school and, 281–3 quantitative substantially test of, anticompetitive theory, Chicago 290, 296, 297, 304 school critique and, 279–81, 308 for reputation, 287–8

Index 411

rule of reason and, 291, 292, 293, United States v.Brown University, 294, 295, 297, 299, 300, 302n57 109n37, 127n25 rule of reason, per-se rule standard United States v.Colgate & Co., 167, and, 295–301 247–8, 263–4, 270–8 single product, 293–5, 295n42, United States v.Columbia Steel Co., 297–8, 298n49 318 specific intent in, 302 United States v.Container Corp.of switching costs and, 300 America, 152–4 “taxing” effect on desired product United States v.Continental Can Co., by, 308–9 324–5 technological, 301–2 United States v.E.C.Knight Co., 29, timing of, 293–4, 301 90n1 transaction costs and, 282 United States v.E.I.du Pont De uniqueness of product with, 296–7, Nemours & Co.(Cellophane), 299, 300 232, 232n6, 237–9, 263, 264, 292, vertical mergers equivalent to, 339 324 tying and exclusive dealing, 30, 51, 54. United States v.E.I.du Pont De See also exclusive dealing Nemours & Co.(General Motors), 335–8 Union Leader Corp.v.Newspapers of United States v.Falstaff Brewing New England, 247, 249, 250 Corp., 349 unions, 61062 United States v.First National United Mine Workers of America v. Pictures, 168–9 Pennington, 353, 353n7 United States v.General Dynamic United States Steel Corp.v.Fortner Corp., 311, 326–8, 340 Enterprises (II), 295–7, 299 United States v.General Electric Co., United States v.Addyston Pipe & 267 Steel Co., 28n3, 31, 99, 102, 104, United States v.Griffith, 195–6, 201–2, 112, 119, 264, 326 203, 212, 244, 247 United States v.Aluminum Co.of United States v.Jellico Mountain Coal America (Alcoa), 189–93, & Coke Co., 90n1 204–5, 223, 228 United States v.Jerrold Electronics current status of doctrine of, 194–5 Corp., 293–5, 307n66 multimarket monopoly, relevant United States.v.Joint Traffic Assn., 94, market and, 239–43 98, 264 refinement of doctrine of, 195–6 United States v.Loew’s, 292 United States v.Aluminum Co of United States v.Microsoft, 228, 302 America (Rome Cable), 323–4 United States v.Milk Drives & United States v.Arnold, Schwinn & Dairy Employees Union, Co., 265, 266 217n64

412 Index

United States v.Parke, Davis & Co., collusion facilitated from, 337–8, 273, 275, 277 337n12 United States v.Philadelphia National competition substantially reduced Bank (PNB), 321–4, 327 by, 338–9 United States v.Sealy, 118 concentration and, 339 United States v.Socony-Vacuum Oil consumers served in, 334 Co., 109–10, 112, 121, 143, 144, development of, 335–40 152, 166, 179, 244, 353 economic and historical factors United States v.Topco Associates, and, 339, 344 118–20, 122, 126, 262, 266, 267 for economy of scale, 336 United States v.Trans-Missouri efﬁciency defense for, 334, 340, Freight Assn., xiv, 40, 90–4, 341, 344 97–8, 100, 101, 102, 105, 106–7, entry impairment with, 335, 336, 112, 171, 191, 317, 326, 366 340–1 United States v.Trenton Potteries Co., exclusive dealing similar to, 333, 106–8, 109, 111–12, 116, 122, 340 126n23, 171, 293n39, 353 failing company defense for, 320, United States v.United Shoe 327 Machinery Corp., 196–201, 215, foreclosure (of competition) by, 285, 287, 294–5 311–12, 335, 337, 338–40 United States v.United States Gypsum incipiency doctrine and, 339–40 Co., 54, 154 locks up of retail by, 335 United States v.United States Steel nature and purpose of, 339 Corp., 187–8, 193, 194, 317–18 opportunistic bargaining reduced United States v.Von’s Grocery Co., in integration of, 343–4 325–7 per-se rule and, 317, 340 United States v.Winslow, 245, 250 procompetitive theories for, 333–4 U.S.v.Grinnell Corp. , 29n5, 215 rule of reason consideration for, U.S.v.Syufy Enterprise , 194 333, 339–41, 344 U.S. v. Terminal Railroad, 180, 207, for smaller companies (to compete 210, 335 with larger ones), 339 utilitarian case for per-se rule, 116, successive monopoly model for, 117–25, 131, 293n39 334 transaction costs models and, 334, vertical mergers 341–4 anticompetitive theories and, tying equivalent to, 339 335 welfare tradeoffs of, 333 Clayton Act (amended) and, 338 vertical restraints Clayton Act (unamended) and, agreement, 270–8 335–6 Colgate doctrine and, 270–2

Index 413

compliance of manufacturer and, effects, 41, 41n44 273 market’s contribution to, 3–4, Dr.Miles/Colgate boundary and, 4n2 272–8 monopoly, consumer, society and, duty to deal in, 270–1 12–13, 20, 44 exclusivity agreements and, 262–4 welfare. See social welfare law, justifications and, 252–61 welfare tradeoff model, 315–17, manufacturer retains title and, 330–2, 333 267–71 wheeling contracts, 211–12, 280, 281, nonprice, 262–7 282 resale price maintenance of, Whinston, Michael, 281–2, 308 252–62 White, Justice, 39, 52, 94, 101–2, territorial restrictions of, 263, 366 264–7 wholesaler, 133, 167, 181, 211, 254, veto, 178, 180, 181 268, 273 victim, identifiable versus Wickens v.Evans, 101n20 unidentifiable and antitrust Williamson, OIiver, 23, 315–16 standing, 61, 61n38 Willig, Robert, 236–7, 322 Wyzanski, Judge, 197–200, 243, 247, waste, monopoly, 19, 19n16 248 wealth determining of antitrust and, 43 Yellow Cab v.U.S.,79