Preface

• Pages: 15-16

PREFACE

At least since GTE Sylvania, 1 the Supreme Court has looked to

economics in evaluating vertical restraints, and it stressed in Sharp

Electronics2 that economic analysis

is

the bedrock for testing distribution

practices under the antitrust laws. Taking our cue from the Court's

approach, we have attempted in this book

to

look at the economics

of

product distribution and consider whether the courts have formulated

legal standards consistent with the economics. The book does

so

by

focusing

on

the sale

of

goods through dealers, distributors and

franchisees.

This work bundles, to use an economic term, the law and economics

of

distribution, and the exercise shows that there

is

high correlation

between how economists view distribution practices and how courts have

applied the federal antitrust laws. The book grows out

of

an effort by the

Economics Committee and the Distribution and Franchising Committee

of

the Section

of

Antitrust Law

of

the American Bar Association

to

study

the convergence

of

economics and law

in

distribution and vertical

restraints, and the final work

is

the result

of

a significant investment

of

time and effort by a number

of

economists and lawyers.

We

consider

in

Chapter I how manufacturers and other suppliers

select methods for distribution

of

products, from using dealers and

distributors to franchising, and

we

look closely at franchising and its

economic underpinnings. The chapter provides a general outline

of

federal and state laws regulating distribution. The contributing authors

to

this chapter are Thomas

J.

Collin, Su

Sun

and Francine Lafontaine.

Chapter

II

looks at resale pricing issues, from resale price

maintenance

to

regulating price advertising, and the contributing authors

are Elizabeth B. McCallum and Howard

P.

Marvel.

Chapter III

is

a general overview

of

the economics

of

nonprice

restraints, and the contributing authors are Matthew B. Wright and

Timothy

P.

Daniel.

1.

Cont'! T.V., Inc.

v.

GTE Sylvania Inc.,

433

U.S.

36

(1977).

2.

Bus. Elecs. Corp.

v.

Sharp Elecs. Corp.,

485

U.S. 717,

731

(1988) ("[i]n

resting our decision upon the foregoing economic analysis, we

do

not

ignore common-law precedent

...

").

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