The Roberts Antitrust Court: A Transformative Beginning

DOI10.1177/0003603X0705200306
AuthorDaniel J. Gifford,E. Thomas Sullivan
Date01 September 2007
Published date01 September 2007
Subject MatterA Continuing Symposium on Antitrust and the Roberts Court
THE
ANTITRUST
BULLETIN:
Vol. 52, Nos. 3&4/Fall-Willter 2007 :
435
be
Roberts
antitrust
court:
Atransformative beginning
BY
DANIEL
J.
GIFFORD*
AND
E.
THOMAS
SULLIVAN**
Since John Roberts has
been
its Chief Justice, the Supreme
Court
has
been
imposing a
new
level of rationality, consistency,
and
indeed, pre-
dictability,
upon
antitrust
law.
None
of its
antitrust
decisions are a
surprise. Indeed, the
law
that
is emerging from these cases further
develops the preexisting doctrinal core, eliminating the inconsisten-
cies
that
had
arisen over time. Seven cases
have
been decided in the
Court's
first
two
terms,
but
the change is more
than
incremental.
It
signals
a
transformation.
As
discussed
below,
these
cases,
in
the
aggregate, are incrementally improving societal economic welfare. In
addition, the
Court's
new
decisions also evidence an increasing sensi-
tivity to the potential impact of type one errors (false positives)
upon
that welfare.
I.
PROLOGUE
Antitrust law, as is widely recognized, is largely case law.
It
rests
upon
a few
statutes
that
are
phrased
in
broad
and
imprecise
lan-
guage: The
Sherman
Act, for example, prohibits concerted "restraints
*Robins, Kaplan, Miller &Ciresi Professor of Law, University of Min-
nesota.
** Senior Vice President and Provost, and Julius E. Davis Chair in Law,
University of Minnesota.
©2007
/Jy
Federal
LegalPuoiications. Inc,
436 THE ANTITRUST BULLETIN:
Vol.
52, Nos. 3&4/Fall-Winter2007
of
trade"
and
"monopolization"
or
attempts
to "monopolize."! The
common
law
had
developed
ajurisprudence governing unreasonable
restraints of trade,
and
the relation of the
common
law doctrine to the
Sherman
Act
has
remained in tension over the years.' Even so, to the
extent
that
the
common
law
tradition is
properly
an influence on the
Sherman
Act, it
adds
support
to the
common
understanding
that
Congress, by legislating broadly,
intended
the prohibitions of the Act
to be
developed
by
the
courts
and
adjusted
over
time to
changing
economic conditions
and
new
insights into business behavior. In pro-
hibiting
"monopolization,"
Congress
employed
a
term
etymologi-
cally
related
to
"monopoly"
but
nonetheless
different. The
courts
have
been
struggling
with
the meaning of
that
term for
most
of the
last
century
and
aquarter.'
In
the
1970s,
the
Court
began
its
embrace
of
Chicago
school
antitrust
analysis.
In
1974, after having
ruled
in favor of the govern-
ment
in
every
merger
case
that
had
come before it
during
the preced-
ing
decade
and
a
half,'
the
Court
decided
three
merger
decisions
against
the
government.'
These
decisions
probably
began
the
so-
called
"antitrust
revolution:"
in
which
the
Court
progressively
embraced
economic analysis as
providing
the principal
support
for
its decisional law. By 1978, the
Court's
decision in GTE Sylvania'
had
removed
any
doubt
that
it
was
moving in this direction.
15 us.c. §§ 1, 2 (2000).
See
United
States v.
Addyston
Pipe &Steel Corp., 85 Fed. 271 (6th Cir.
1898), aff'd, 175 us.211 (1899).
See Daniel J. Gifford, What is
Monopolization
Anyway? The
D.C.
Circuit
Grapples
with
Some
Perplexing
Issues,
46
ANTITRUST
BULL.
797 (2001).
See
United
States
v. Von's Grocery Co., 384
u.s.
270, 301 (1966) (Stew-
art,
J.,
dissenting)
(complaining
that
the
sole
consistency
in
the
Court's
merger
decisions
was
that
"the
Government
always
wins").
United
States
v.
Gen.
Dynamics
Corp.,
415 U.s. 486 (1974);
United
States
v.
Marine
Bancorporation,
Inc.. 418 U.s. 602 (1974);
United
States
v,
Conn.
Nat'l
Bank, 418 us. 656 (1974).
See generally THE
ANTITRUST
REVOLUTION:
ECONOMICS,
COMPETITION,
AND
POLICY
(John E.
Kwoka,
Jr. &Lawrence J.
White
eds., -lth ed. 2004).
Continental
T.V.,
Inc. v. GTE Sylvania, Inc., 433 U.s. 36 (1977).
THE
ROBERTS
ANTITRUST
COURT
437
Broadly
speaking,
Chicago
school
antitrust
analysis
develops
rules for evaluating
business
behavior
that
are
based
upon
neoclassi-
cal economic analysis.'
It
subjects
proposed
rules of
behavior
to rigor-
ous
economic
analysis
to
assess
their
likely
effects.
Under
the
assumptions
of the neoclassical system, society in the aggregate maxi-
mizes its wealth
when
business
firms
trade
in
open
and
competitive
markets, designing
and
producing
their
products
and
services as
they
see fit;
adopting
marketing
strategies as seems
best
to them;
and
trad-
ing
on terms
that
are acceptable to them, all subject to the discipline
of
the
market. The theory states
that
the free interaction of sellers
and
buyers
combined
with
the incentives of
each
actor to
better
his
own
position
will
move
society's
goods
and
services into their
most
valu-
able uses. In the
language
of economists, society's resources will be
allocated in accordance
with
demand.
And
producers will be
pressed
to
lower
their costs, thus
enabling
society in the aggregate to maxi-
mize
the benefits it receives from its resources."
Prior
to the
antitrust
revolution
of the 1970s,
antitrust
decisional
law
did
not
always
favor efficient results. Other, nonefficiency, goals
often
underlay
antitrust
decisions.
Some
such
decisions
were
designed
to
help
small
business,"
to
ensure
rivalry
regardless
of
Sec
Richard A. Posner, The
Chicago
School
of Antitrust Analysis, 127
U.
PA.
L.
REV.
925, 926-32 (1979)
(outlining
early
development
of Chicago
school).
We
understand
that
market
measures
of
productive
and
allocative
efficiencies do not necessarily reflect
nonmonetary
personal preferences
and
that
there is no
way
of
measuring
the
subjective intensity of those prefer-
ences,
much
less of
comparing
the
intensities of interpersonal preferences.
See,
e.g., Herbert
Hovenkamp,
Positivism in Law&
Economics,
78
CAL.
L.
REV.
815, 841 (1990) ("interpersonal comparisons of cardinal utilities are generally
impossible"). We therefore accept societal
wealth
maximization as the best
practical goal of antitrust law.
Sec
Richard A. Posner, Utilitarianism,
Economics,
and
Legal
Theory,
8
J.
LEGAL
STUD. 104, 119 (1979).
III Brown Shoe Co. v. United States, 370 U.s. 294, 344 (1962) ("[W]e can-
not
fail to recognize Congress'
desire
to
promote
competition
through
the
protection of viable, small, locally
owned
business. Congress appreciated that
occasional higher costs
and
prices
might
result from the maintenance of frag-
mented
industries
and
markets. It resolved these competing considerations in
favor of decentralization.").

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