Thursday, March 29, 2012

Exclusion as a Core Competition Concern

Posted by D. Daniel Sokol

Jon Baker (American University Law) explores Exclusion as a Core Competition Concern.

ABSTRACT: This article challenges the consensus in contemporary antitrust discourse placing exclusionary conduct at the periphery of competition policy. Contrary to common antitrust rhetoric, exclusion is as central as collusion as a matter of precedent, economics, the structure of doctrinal rules, and sound competition policy. The article’s economic analysis incorporates the modern learning about the conditions for profitability of foreclosure through purchase of an exclusionary right; its legal analysis synthesizes from the case law a truncated rule for the reasonableness review of exclusionary conduct across a wide range of doctrinal categories; and its policy analysis explains why decision-theoretic (error cost) considerations do not suggest a lesser role for exclusion than collusion. Recognizing exclusion as a core antitrust concern will protect the legitimacy of antitrust’s exclusionary conduct rules against pressure for modifications that would limit enforcement. It may also encourage criminal prosecutions of exclusionary conduct and shift enforcement attention toward preventing exclusionary conduct that forecloses potential entry in markets subject to rapid technological change.

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