Legal doctrines vary in the extent to which they apply either detailed,categorical rules or broad, open-ended standards that allow forcase-specific adjudication. Antitrust law is generally thought of asinhabiting the standards end of this spectrum. In fact, however, despitethe generality of the enabling statutes antitrust law is rife withcategorical distinctions.In Part I, we explore not only the well-known distinction between conductthat is per se illegal and conduct judged under the rule of reason, butalso a number of categorical distinctions the courts draw, either to helpdelineate the scope of the per se rule or to create distinctions within thescope of the rule of reason itself. By and large these rules don't comefrom the antitrust statutes. They are created by courts, who are in effectconverting case-specific standards en masse into categorical rules.In Part II, we identify a number of problems with these distinctions. Oneproblem is administrative: courts spend a great deal of time trying toparse conduct in order to put it on one side or another of the lines theyhave created. Indeed, in many cases courts spend more time oncategorization than they do on actual economic analysis of the case itself.Second, judicial antitrust categories are subject to manipulation. Partiesgo to great lengths to fit into a box that will give them more favorabletreatment, sometimes by legal argument, sometimes by restructuring atransaction, and sometimes by concealing or misrepresenting the facts ofthat transaction. Third, a number of the categories the courts have createdmake no sense, whether because they have lost their meaning over time,because their boundaries have eroded, because they actually tell us verylittle of relevance to the competitive effects of the transaction, orbecause they are simply dumb. The net result is a mess. Categories havebecome conclusions, displacing the fact-specific economic analysis in whichantitrust law is supposed to be engaging.In Part III, we argue that there is a better way. We evaluate the costs andbenefits of the judicial creation of categories, and contend that thecomplex of antitrust boxes the courts have created today does more harmthan good. We don't mean to suggest there is no value to categories, andthat everything must be thrown into a pure cost-benefit analysis. Somerules (the per se rule against price fixing, for instance) make sense.Rather, the important thing is to make sure that the categories we use haveempirical support, and that they are communicating valuable information tocourts about the competitive effects of a general practice. We think thecourts have gone too far in the creation of rules in a variety of cases.Finally, we suggest that courts make more use than they do of certain tools- the doctrine of direct economic effect and empirical evidence - aspowerful filters for distinguishing good from bad antitrust claims.
Applying the rule of per se and rule of reason to assess the violation of the Competition Law by the IPRs owners
