The Hidden Rules of a Modest Antitrust

Reforming antitrust’s rule of reason by shifting burdens of proof to defendants will not solve antitrust’s enforcement drought. For the drought is due in part to the cost to enforcers of identifying rule of reason cases to bring and not just to the cost of winning the cases that enforcers do bring. Enforcement costs matter because enforcers’ budgets are limited—they have failed for a long time to keep up with GDP—and the rule of reason’s emphasis on case-specific effects makes it costly for enforcers to identify good cases to bring. The Supreme Court’s adoption of the rule of reason approach in recent decades must therefore have caused enforcers to police less conduct in order to balance their budgets, thereby turning the rule of reason into a hidden rule of per se legality for conduct no longer subject to enforcers’ watchful gaze. Whether this hidden rule has harmed consumers depends on whether the Court believes suspect conduct to be mostly good for consumers—in which case per se rules of legality are appropriate—or mostly bad, in which case the Court ought to balance enforcement budgets by scrapping the rule of reason in some areas and replacing it with the inexpensive-to-enforce per se rules of illegality that characterized mid-twentieth-century antitrust law. Either way, the Court’s current failure explicitly to recognize that an antitrust enforcement apparatus of modest means is incapable of delivering upon the idealism of case-by-case inquiries into consumer harm is intolerable. For the gap it creates between the careful adjudication described by the Court and the non-enforcement of actual practice makes a mockery of the law.