The Viability of the Current Law on Horizontal Restraints

Abstract

The antitrust tradition is a unique and valued aspect of American political and economic culture.However shopworn, the analogy to a constitution is apt.'The Sherman Act and companion statutes have embodied community ideals about and provided a structure for the governance of America's integrated, continental economy.This traditionthat constitution-is approaching an age that, for any American institution, may be called venerable.It is fitting, then, to examine the current articulation of antitrust and consider how well it can be expected to serve the next century.My task is to discuss the adequacy of today's law of horizontal restraints for handling the anticipated problems of the 1990's.I accept at the outset Justice Stevens' definition of a horizontal restraint as any "agreement among competitors [about] the way in which they will compete with one another." 2 In Part I, I sketch the law of horizontal restraints as it exists today, with emphasis on recent developments along with their problems and implications.In Part II, I try to identify the emerging issues with which that law may have to deal.In so doing, I have occasion to look at some developments in economic theory and related developments.I also examine the business press and other sources of information about economic problems, market reactions, and governmental responses.On occasions like this it is tempting to indulge in wide-ranging talk about micropolicy.Although I will try to resist, I do have something to say about antitrust values.The radical position-and today the politically salient one-focuses on allocative efficiency.It posits that antitrust should provide rigorous analytical techniques to identify output-restricting market conduct; that is, its norms should deter and its remedies should correct such conduct. 3More conservative commentators, myself among them, express their aspirations for antitrust in more conventional