MIDTERM:
Antitrust laws thought to have 4 basic goals
o Could substitute them for a preamble
o The goals are important when looking at situations of ambiguity
§ Antitrust standing – area where courts resorted to looking at goals of AT to see which P should be given standing to sue
o 4 goals not necessarily consistent with others, but they can help you know where to start looking
o 4 goals (from legislative history)
§ Prevent evils of monopoly
· To protect primarily consumers from evils of monopoly
· What would evils be?
o Higher prices
o Lack of choice
o Decreased quality
o Lack of service
o Lack of innovation
§ Increase economic efficiency
· There are different kinds of economic efficiency (3 relevant kinds)
o Allocative efficiency
§ Prof thinks this is the primary efficiency goal
§ Macro concept
§ Goods put to most efficient use
o Productive efficiency
§ Cost reduction
§ Rationalize our cost
§ Cost per unit will go down (at least immediately)
§ Example: 2 guys at ½ capacity equaling 100% capacity, cost per unit goes down
o Transactional efficiency
§ Protect and promote system of independent business
· Does not mean to protect certain individual businessmen, means to protect individual business
· Avoid fear of bureaucracy
· “We are a nation of shopkeepers, not a nation of clerks”
· Important to our pol/econ philosophy
· Individual decision-making when it comes to economic efficiency
§ Prevent undue econ concentration
· When private sector becomes too powerful, pol system will be affected
o Mergers
§ Beyond a point, undue econ concentration and democracy is threatened
o Goal of efficiency and protecting decision-making can be conflicting
§ May need to fire mom and pop business owners to gain efficiency
o Bork – “Antitrust Paradox”
§ Only goal of AT is to increase consumer welfare
· Means what by consumer welfare?
o When societal wealth is maximized
§ Non-interventionist policy
· If producer can increase price to consumers and consumer will pay me for that product and producer will not lose sales, then comparing the “before price increase” and “after price increase” – selling same number of units at increased price
o Producer is better off
o Consumer spent more money, presume that a rational consumer would not pay more unless he values the product more
§ So consumers are not worse off
§ They pay more, but the
combination has no limit
o “conspiracy” – drawn from crim law
§ Can be guilty of conspiring even if don’t know each other
o “in restraint of trade or commerce”
§ What is restraint of trade?
§ From requirements K hypo – restrained in that you lose independence to make decisions in future
§ Brandeis – all Ks theoretically cause restraint
o “every”
§ Should this be read literally?
· The answer today is NO
· Lack of modifier in front of “restraint”
· Today – read to read “unreasonable” restraint
· Not every restraint is unreasonable
o Jurisdictional element – “affect interstate or foreign commerce”
§ Limited jurisd
§ If Congress could have reached certain K, it did
§ Co-extensive with commerce clause
§ Extends fully with commerce of U.S.
– “Horizontal” action and “vertical” action
o Horizontal – agreements btwn competitors and possible competitors
§ Horizontal is more suspect
o Vertical – buyers and sellers, those in chain
