Per Se Illegality of Concerted Refusals to Deal: A Rule Ripe for Reexamination

Section 1 of the Sherman Act proscribes [e]very contract, combination . . . or conspiracy, in restraint of trade. Early Supreme Court cases interpreting this provision held that it required a determination by the trier of fact of the reasonableness of the challenged conduct in each case — an approach which came to be known as the rule of reason. In subsequent cases, however, the Court has held that certain conduct is unreasonable per se. That is, once a court has determined that such conduct has taken place, it is foreclosed from undertaking an inquiry into the reasonableness of that conduct. One form of activity that has been declared unreasonable per se is the group boycott, or concerted refusal to deal. Recently, this particular doctrine has been the subject of much concern and criticism by lower federal courts and commentators. Although many courts adhere unquestioningly to this per se rule, others have either found the doctrine inapplicable to the facts at bar or resorted to limiting a rule upon which the Supreme Court has placed no limitations. As a result, the present state of the law reflects much confusion. Recently, in Continental T.V., Inc. v. GTE Sylvania Inc. the Supreme Court took a step unprecedented in at least the last sixty-five years of antitrust jurisprudence — it overturned a per se rule which had outlawed all vertical territorial and customer restraints in which the buyer acquired title to the goods, and reinstated a rule of reason analysis for this type of conduct. One of the rationales given by the Sylvania Court for rejecting a per se approach was the frequent criticism the old rule — the Schwinn doctrine had received both in the literature and in the lower courts. The Supreme Court has repeatedly indicated its adherence to the per se rule respecting group boycotts. Yet, in view of the recent treatment this rule has received in the courts and in the law journals, the Sylvania decision gives reason to believe that this particular doctrine might also be the subject of reexamination and possible modification. This Article will first explore the development of the rule holding concerted refusals to deal unreasonable per se and the justification for such an approach. It will then consider why many courts and commentators are dissatisfied with the present approach and will discuss how lower federal courts have avoided using it. Finally, the Article suggests that criticism of the per se rule is justified, and proposes a partial return to a rule of reason analysis, with carefully defined criteria for testing legality and a more narrowly circumscribed per se rule