Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Sunday, April 15, 2007

Rules Versus Standards in Antitrust Adjudication

Posted by D. Daniel Sokol

Dan Crane of Cardozo Law School (whom I finally met on Thursday night) has an article forthcoming in the Washington & Lee Law Review that is worth reading-- Rules Versus Standards in Antitrust Adjudication.

ABSTRACT: Antitrust law is moving away from rules (ex ante, limited factor liability determinants) and toward standards (ex post, multi-factor liability determinants). This movement has important consequences for the structure of antitrust adjudication, including shifting ultimate decision-making down the legal hierarchy (in the direction of juries, trial courts sitting as fact-finders, and administrative agencies) and increasing the importance of economic experts. The efficiency consequences of this trend are often negative. Specifying liability determinants as open-ended, unpredictable standards increases litigation costs, chills socially beneficial industrial practices, allocates decision-making on microeconomic policy to unqualified juries, and facilitates strategic misuse of antitrust litigation by rent-seeking competitors. Instead of following a generalized preference for standards, courts should consider five factors in choosing the ex ante precision of liability determinants: (1) whether the lawsuit was brought by the government or a private party;  (2) whether the legal determinant would create liability or immunize against it; (3) whether  the remedy sought is prospective (i.e., injunctive) or retrospective (i.e., damages); (4) whether the conduct is idiosyncratic or paradigmatic; and (5) whether the misconduct alleged is collusion or exclusion.

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