Friday, April 26, 2013
Posted by D. Daniel Sokol
Greg Werden (DOJ) blasts a number of scholars with his paper Antitrust's Rule of Reason: Only Competition Matters.
ABSTRACT: The rule of reason is the standard for testing whether a restraint violates the Sherman Act. The thesis of this article is that the only issue under the rule of reason is the impact of a restraint on the competitive process; the Sherman Act does not employ a welfare standard. This thesis is developed by reviewing Supreme Court decisions articulating and explicating the rule of reason, then outlining its proper application consistent with precedent. Debates of recent decades are revisited to clarify welfare concepts and explain how the views of Robert Bork were distorted and maligned. The article also explains how promoting welfare can be the overarching goal of the Sherman Act, even though welfare considerations are not directly relevant in applying the Act. Finally, the article shows that no Sherman Act case cited by scholars as adopting or implying a welfare standard actually did so.