Sunday, August 14, 2011
The Sixth Circuit's Application of the Rule of Reason in Realcomp II—Less About the Rule's Reasonableness than the Reason for the Rule
Posted by D. Daniel Sokol
ABSTRACT: The Federal Trade Commission scored a significant victory when the Sixth Circuit applied the rule of reason to uphold the FTC’s order in the Realcomp II case.1 The FTC had found that a real estate multiple listing service (MLS) violated Section 1 of the Sherman Act by adopting and enforcing a “website policy” that allegedly restricted the dissemination of certain kinds of MLS content via third-party websites. The decision offers some important lessons about the way courts approach rule of reason analysis, particularly because it is one of relatively few recent decisions reaching the merits in a rule of reason challenge.2 One key lesson is that the lack of a cognizable procompetitive justification— or evidence of actual procompetitive benefits—will tend to lower the burden plaintiffs bear in making a threshold showing (often called a prima facie case) of unreasonableness. The Sixth Circuit’s decision is also noteworthy for the question it did not reach—namely, whether the FTC properly applied its “inherently suspect” variant of the quick-look doctrine to the restraint at issue in the case.