The chicago school and exclusionary conduct

Harvard Journal of Law and Public Policy

Volumn 31, Issue 2, 2008, Pages 439-447

  Easterbrook, Frank H ^a,b  

^a United States Court of Appeals for the Seventh Circuit ^*

^b UNIVERSITY OF CHICAGO   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 46049113694     PISSN: 01934872     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (33)

1. ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF (The Free Press 1993) (1978).
2. See United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 323 (1897).
3. JOSEPH A. SCHUMPETER, CAPITALISM, SOCIALISM, AND DEMOCRACY 84 (3d ed. 1950).
4. Schor v. Abbott Labs., 457 F.3d 608, 612 (7th Cir. 2006), is among many decisions making this point.
5. SCHUMPETER, supra note 3; see also Edward S. Mason, Schumpeter on Monopoly and the Large Firm, 2 REV. ECON. & STAT. 139, 139 (1951) (characterizing Schumpeter as arguing "that market power is necessary to innovation and that innovation is the core of effective competition").
6. See, e.g., Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); RJ. Reynolds Tobacco Co. v. Cigarettes Cheaper!, 462 F.3d 690 (7th Cir. 2006).
7. See Louis Kaplow, Extension of Monopoly Power Through Leverage, 85 COLUM. L. REV. 515, 515 (1985);
8. see also Alex P. Jacquemin, Market Structure and the Firm's Market Power, 2 J. INDUS. ECON. 122, 124 (1972).
9. See Daniel A. Crane, Hovenkamp: The Antitrust Enterprise: Principle and Execution, 105 MICH. L. REV. 1193, 1194 (2007) (book review).
10. See Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28, 45 (2005) ("[T]he lesson to be learned from International Salt [Co. v. United States, 332 U.S. 392 (1947)] and the academic commentary is the same: Many tying arrangements . . . are fully consistent with a free, competitive market.").
11. Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985).
12. Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).
13. I explore this subject in The Limits of Antitrust, 63 TEX. L. REV. 1 (1984),
14. and Ignorance and Antitrust, in ANTITRUST, INNOVATION, AND COMPETITIVENESS 119 (Thomas M. Jorde & David J. Teece eds., 1992).
15. I elaborate in When is it Worthwhile to Use Courts to Search for Exclusionary Conduct?, 2003 COLUM. BUS. L. REV. 345,
16. and On Identifying Exclusionary Conduct, 61 NOTRE DAME L. REV. 972 (1986).
17. United States v. Microsoft Corp., 87 F. Supp. 2d 30, 37, 39 (D.D.C. 2000).
18. United States v. Microsoft Corp., 253 F.3d 34, 88 (D.C. Cir. 2001).
19. Id. at 88, 97.
20. Matsushita, 475 U.S. 574.
21. Like other supposed "victims" of predatory or exclusionary conduct, they did not have any trouble raising capital. Money markets are large, competitive, and liquid; no more is required. No one supposes that capital markets are "perfect" in the sense that all profitable ventures are funded, and no others are. Life is full of chances, and errors can be caused by fraud, costly information, or the stochastic quality of competition. But these errors are not systematic: it is no more likely that a good project will fail to find suppliers of capital than that a bad project will do so. (In competition, if errors were biased, the lenders making such errors would go out of business.)
22. See, e.g., Clement G. Krause et al., The Bell System Divestiture/Deregulation and the Efficiency of the Operating Companies, 42 J.L. & ECON. 61 (1999).
23. See, e.g., Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993).
24. See Frank H. Easterbrook, Workable Antitrust Policy, 84 MICH. L. REV. 1696, 1711-12 (1986).
25. Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., 127 S. Ct. 1069 (2007).
26. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 11 (1984).
27. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28 (2005).
28. Spectrum Sports, 506 U.S. 447.
29. 508 U.S. 49 (1993).
30. 317 U.S. 341 (1943).
31. Lochner v. New York, 198 U.S. 45 (1905).
32. FTC v. Brown Shoe Co., 384 U.S. 316 (1966).
33. United States v. Von's Grocery Co., 384 U.S. 270 (1966).