Antitrust made (too) simple

• Author: Christopher R. Leslie
• Position: Professor of Law, University of California Irvine School of Law
• Pages: 917-940

ANTITRUST MADE (TOO) SIMPLE

C

HRISTOPHER

R. L

ESLIE

*

Robert Bork fundamentally changed the field of antitrust law with the pub-

lication of his book The Antitrust Paradox in 1978.

1

The book’s primary

themes were that antitrust doctrine should be concerned only with economic

efficiency (which Bork termed “consumer welfare”) and that antitrust law had

come untethered from efficiency. Bork championed per se legality for a vari-

ety of conduct, including resale price maintenance, non-price vertical re-

straints, and tying arrangements. He advocated greater latitude for horizontal

mergers and complete immunity for all vertical and conglomerate mergers.

Now several decades old, Robert Bork’s The Antitrust Paradox continues

to be among the most influential scholarship in antitrust law.

2

Opinions differ

as to the basis for Bork’s influence. Those who agree with Bork’s description

of antitrust law and his prescriptions on antitrust policy would no doubt argue

that it has been influential because Bork is correct on the merits.

3

Some critics

have suggested that the book’s influence stems from its circular reasoning,

“which is its strength because circular logic is not rebuttable.”

4

This essay

posits an alternative explanation for Bork’s influence: even though Bork was

* Professor of Law, University of California Irvine School of Law. The author thanks Tony

Reese and Su Sun for comments; the organizers of this Bork Symposium—Barak Orbach and

Danny Sokol; and the members of the Advanced Antitrust Working Group at Chicago-Kent

College of Law—Leo Carameli, John Guzzardo, Christopher Haggerty, Jason Hirsh, and

Michael Kasdin.

1

R

OBERT

H. B

ORK

, T

HE

A

NTITRUST

P

ARADOX

: A P

OLICY AT

W

AR WITH

I

TSELF

(rev. ed.

1993).

2

See, e.g., R

UDOLPH

J.R. P

ERITZ

, C

OMPETITION

P

OLICY IN

A

MERICA

: H

ISTORY

, R

HETORIC

,

L

AW

258 (rev. ed. 1996) (referring to The Antitrust Paradox as “probably still the most influen-

tial book about antitrust policy.”); William E. Kovacic, The Antitrust Paradox Revisited: Robert

Bork and the Transformation of Antitrust Policy, 36 W

AYNE

L. R

EV

. 1413, 1417 (1990) (“Since

1890, no single scholarly work has exerted a greater influence than The Antitrust Paradox on the

direction of antitrust policy.”).

3

Another reason that The Antitrust Paradox has been so influential is that Bork had the

ability to implement the ideas espoused in his book as a federal judge for the D.C. Circuit.

4

P

ERITZ

,supra note 2, at 244 (stating that Bork “begins with the assumption that consumers

maximize their welfare and ends with the conclusion that what is chosen [by consumers] maxi-

mizes ‘consumer welfare.’”).

917

918

A

NTITRUST

L

AW

J

OURNAL

[Vol. 79

largely wrong in his description and analysis of antitrust doctrine, he is influ-

ential because his explanations of complex economic phenomena were so

simple.

This essay examines four issues related to the simplicity of Bork’s ap-

proach to antitrust law. First, it shows how Bork oversimplified the legal land-

scape of antitrust law, which he then used as a foil. Second, it discusses how

Bork made sweeping claims based on weak evidence, oversimplified assump-

tions, and logical fallacies. Third, it hypothesizes why Bork’s views have been

so persuasive to judges. And, fourth, it condemns Bork’s ultimate legacy—his

attempt to thwart the evolution of antitrust economics beyond his basic model

where all markets are efficient and antitrust law is unnecessary. The essay

concludes that the greatest strength of Bork’s scholarship—its simplicity—is

also, ultimately, its greatest weakness.

I. OVERSIMPLIFICATION OF THE LEGAL LANDSCAPE

Bork began his critique of antitrust law with the premise that antitrust doc-

trine was out of control, condemning all manner of business decisions indis-

criminately. To make this claim, Bork exaggerated the landscape of antitrust

law, trying to make it appear more overreaching than it actually was in 1978.

For example, Bork asserted that “vertical mergers are today all but completely

illegal, on the theory that the manufacturer who acquires a retailer also ac-

quires the ability to shut rival manufacturers out of that segment of the mar-

ket.”

5

Bork cites no statistics for his claims because he could not. Far from

being “all but completely illegal,” vertical mergers were common in the years

before the publication of The Antitrust Paradox.

6

In another example of misrepresenting the state of the law, Bork suggested

that requirements contracts were treated as “inherently exclusionary” and

were consequently “dealt with severely.”

7

Through this language, Bork im-

plied that requirements contracts fall perilously close to per se illegality. Yet

requirements contracts were not considered presumptively illegal

8

despite

5

B

ORK

,supra note 1, at 137; see also id. at 225 (“With the passage of the 1950 amendment

to Section 7 of the Clayton Act and the subsequent draconian judicial interpretations, vertical

mergers became, if not illegal per se, almost impossible to defend against government

challenge.”).

6

While the federal antitrust agencies challenged 27 vertical mergers between 1960 and 1970,

they challenged only two purely vertical mergers in the 1970s. David Reiffen & Michael Vita,

Comment: Is There New Thinking on Vertical Mergers?, 63 A

NTITRUST

L.J. 917, 917 (1995)

(citing Alan A. Fisher & Richard Sciacca, An Economic Analysis of Vertical Merger Enforce-

ment Policy, 6 R

ES

. L. & E

CON

. 1, tbl.8 (1984)).

7

B

ORK

,supra note 1, at 137.

8

See Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 333 (1961) (“It may well be that

in the context of antitrust legislation protracted requirements contracts are suspect, but they have

not been declared illegal per se.”).