Antitrust 1986-87: Power and Access (Part I)

• Author: Stephen Calkins,John Deq Briggs
• Date: 01 June 1987
• DOI: 10.1177/0003603X8703200201
• Published date: 01 June 1987
• Subject Matter: Article

The Antitrust Bulletin/Summer 1987

Antitrust 1986-87:

power and access (Part I)

BY

JOHN

DEQ. BRIGGS* and

STEPHEN

CALKINS**

275

In this, our fourth annual review of the year in antitrust, the

challenge again was to identify a theme. In our first year we

likened our effort to a four-minute tour through the Louvre. Our

second survey focused on the matrimonial aspects of

antitrust-

specifically, the courtship between per se rules and the rule

of

reason.' Last year we compared antitrust law to the world's

largest moving sand dune, resting on the shores

of

Lake Michigan

Partner, Howrey &Simon, Washington, D.C.

Visiting Associate Professor, University

of

Pennsylvania Law

School, Philadelphia, Pennsylvania, and Associate Professor, Wayne

State University Law School, Detroit, Michigan.

AUTHORS' NOTE: This article is a revised version

of

remarks delivered at

The Conference Board's 26th Conference on Antitrust Issues in Today's

Economy, March 5, 1987. Professor Calkins prepared and revised Part

I, except

for

A.3

(monopolization); Mr. Briggs prepared and revised

A.3

and Part II. The authors thank Joseph R Bauer, Thomas J. Campbell,

Ernest J. Isenstadt, and Steven C. Salop

for

helpful suggestions, John

F.

Dolan, J. Mark Iwry, and Gary R. Roberts

for

their critical reviews, and

Joan Wadsworth

for

research assistance.

Of

course, any errors are each

author's alone.

J. Briggs &S. Calkins, Antitrust Update, 1984-85 (Mar. 7, 1985).

rs

1987by Federal Legal Publications, Inc.

276 : The antitrust bulletin

and shifting with the prevailing winds from Chicago and points

west.' This year two themes emerge: power and access.

Almost all important recent antitrust developments have in-

volved power or access. Indeed, some questions

of

access also

raised questions of power, as will be seen. When we refer to

"power" we include market power, institutional power, and intel-

lectual power. These issues will be discussed in

Part

I

of

this

article. When we refer to "access" we include several doctrines

that effectively bar plaintiffs from full adjudication

of

their

claims. These doctrines will be discussed in

Part

II

of this article,

which will be published in a forthcoming issue of The Antitrust

Bulletin.

Power

Three kinds of power figured significantly in the antitrust

developments

of

the past year: market power, institutional power,

and the power

of

academic discourse. Market power has emerged

as the central issue in antitrust litigation. An increasing number

of

cases involving vertical and horizontal restraints, as well as

mergers and monopolization, turn on this issue, although few

courts thoroughly understand the concept. In the area of antitrust

policy and enforcement, three antitrust

institutions-the

states,

Congress, and the Federal Trade Commission-have enhanced

their influence or expanded their roles. Finally, antitrust academ-

ics continued to wield considerable power in the marketplace of

ideas: questioning the benefits of mergers, refining the "Chicago

school" analysis, and challenging even newly accepted antitrust

assumptions.

A. Market power

In a 1984 article, Judge (then Professor) Easterbrook pro-

posed that courts simplify antitrust litigation by adopting five

2Briggs &Calkins, The Antitrust Sand Dune, 7

ANTITRUST

No.3,

at 14 (June 1986).

Antitrust 1986-87 : 277

filters for screening non meritorious cases.' The first

of

these

filters was market power. A finding

of

individual or collective

market power should be a prerequisite for any antitrust action,

Easterbrook argued, because "[f]irms that lack power cannot

injure competition no matter how hard they

try."4

In part through his own judicial efforts, Easterbrook's first

filter is gaining increasing acceptance in the courts. In actions

challenging non-price vertical restraints, tying, and even group

boycotts and other horizontal restraints, market power is be-

coming the single most important

element-or,

more specifi-

cally, its absence is becoming the most popular method

of

finding for a defendant. Market power (or its prevention) also

is the essence

of

much of merger law. Finally, in the monopoli-

zation area, some plaintiffs with colorable claims

of

significant

market power are prevailing on fact patterns that involve little

more than old-fashioned "bad acts."

1. MARKET POWER IN SECTION 1 CASES In considering the

role of market power in recent cases brought under section 1

of

the Sherman Act, it is helpful to consider separately actions

challenging non-price restricted distribution, tying, and group

boycotts and other horizontal restraints. Few of the opinions

exhibit an adequate understanding

of

the concept

of

market

3Easterbrook, The Limits

of

Antitrust, 63

TEX.

L.

REV.

1 (1984)

[hereinafter cited as Easterbrook, The Limits

of

Antitrust]; see also

Easterbrook,

Vertical

Arrangements and the Rule

of

Reason, 53

ANTI.

TRUST

L.J.

135,

159-61

(1984) (describing same screens) [hereinafter

cited as Easterbrook,

Vertical

Arrangements]; Markovits, The Limits to

Simplifying Antitrust: A Reply to Professor Easterbrook, 63

TEX.

L.

REV.

41 (1984). Easterbrook's other screens would require plaintiffs to

show

that

there is a logical relation between reduced competition and

defendant(s)' profits,

that

at least vertical practices are widely adopted

in an industry,

that

the firms employing challenged practices have "sub-

stantially lost market position," and

that

the suit was filed by a plaintiff

with proper incentives. Easterbrook, The Limits

of

Antitrust, supra at

23-29.

For

acritique

of

those screens, see O. Williamson, Delimiting

Antitrust (prepared for the Antitrust Policy Institute's Conference on

The Antitrust Alternative, Airlie House, Virginia, Mar. 1987).

4Easterbrook, The Limits

of

Antitrust, supra note 3, at 20.