Per Se Rules in the Antitrust Analysis of Horizontal Restraints

• Author: Jonathan B. Baker
• Date: 01 December 1991
• DOI: 10.1177/0003603X9103600402
• Published date: 01 December 1991
• Subject Matter: New Directions in Compliance

The Antitrust Bulletin/Winter 1991

733

Per se rules in the antitrust analysis

of

horizontal restraints

BY JONATHAN B. BAKER*

Restrictions among competitors, or horizontal restraints, raise the

specter

of

the very trusts that the antitrust laws were enacted to

prevent. They call forth an image of collusion among rivals to

restrict output and raise price, still the paradigm case of an unlaw-

ful restraint on trade. But today this image competes with a sec-

ond, more benign picture:

of

firms working together to reduce

production costs, to lower consumer search or transaction costs,

and to create new products. As Langenfeld and Morris! empha-

*

Director

of

Litigation

Studies,

Economic

Analysis

Group,

Antitrust Division, United States Department

of

Justice.

AUTHOR'S NOTE: The views expressed do not necessarily reflect those

of

the

Department

of

Justice. These remarks were originally prepared as a discus-

sion

of

papers by Paul T. Denis, and James A. Langenfeld and John R. Mor-

ris, at the 1990 meeting

of

the Western Economic Association. The author is

indebted to Paul Denis and Bobby Willig

for

helpful discussions.

Langenfeld &Morris, Analyzing Agreements Among Competitors:

What Does the Future Hold? 36 ANrrrRUST

BULL.

651 (1991). Langenfeld

and Morris' primary interest is to demonstrate that competing members

of

a

trade association can achieve market power through association rules that

merely raise marginal costs for all association members, even though those

rules do not directly affect price. While each competitor experiences higher

costs, each can profit when the collective enforcement of the association

e1992 by Federal Legal Publications, Inc.