Per Se or Rule of Reason?
May 23, 2023
Section 2 of the Sherman Act can be enforced civilly or criminally. It’s been a long time since the DOJ pursued a Section 2 violation as a standalone criminal case, but the possibility that it might do so was a hot topic at the ABA Antitrust Section’s Spring Meeting. The biggest problem would be proving an essential element, the so-called “bad act.” Aggressive competition that results in driving weaker and arguably inefficient competitors from the market isn’t necessarily bad. Even a monopolist is entitled to compete, and arguably consumers are better off if the inefficient competitor is forced from the market. One likely test for a bad act is whether there is any plausible pro-competitive justification. This is often used to establish a per se violation under Section 1 of the Sherman Act. It has generally been the DOJ’s view that it will only bring a criminal case under Section 1 if the conduct is per se unlawful. Such a test is essentially determining whether the defendant intended to compete on the merits or intended solely to obtain or maintain its monopoly.
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