Antitrust Law and Economic Theory: Finding a Balance

Over the past forty years, the federal courts have relied more and more on economic theory to inform their antitrust analyses. Economic theory has indeed provided guidance with respect to antitrust issues and assisted the courts in reaching rational outcomes. At the same time, infusion of economic evidence into antitrust cases has made these cases more complex, lengthier, more expensive to litigate, and less predictable. This Article argues that courts need to restore the balance between facts and economic theory in undertaking antitrust analysis. The problem is not that judges and juries cannot reach good outcomes in antitrust cases, but rather that courts have become too reliant on economic theory in deciding them. Just as courts of an earlier generation became too enamored of per se rules in antitrust cases, some courts today have become too enamored of economic theory in addressing and resolving antitrust issues. Some courts have lost sight of basic antitrust goals and have gotten bogged down in arcane economic tests—relevant market and proof of common impact in class action cases are two examples—which have become obstacles to, instead of tools for, resolution of antitrust disputes. Antitrust is a body of law enacted by Congress and construed by the courts; it is not a compendium of the latest thinking in economic theory. The role of the courts is not to decree economic policy, but rather to implement antitrust policies enacted by Congress. Antitrust has always been a fact-specific enterprise, and courts need to restore the proper balance between fact finding and economic theory by confining economic theory to those areas where it assists antitrust analysis and discarding such theory where it gets in the way. In short, courts need to return to simple, predictable, and administrable—but informed—antitrust rules