Abstract
Antitrust law has two basic ways of analyzing conduct alleged to be anticompetitive. Some conduct is viewed as so inherently pernicious that it is deemed illegal per se; proof that you engaged in the act is enough to condemn you. Everything else is judged under the “rule of reason,” a test that considers and balances the harms and benefits of individual conduct. Over the past four decades, the per se rule has been narrowed to the vanishing point. The result is that with rare exceptions, everything in antitrust falls into the rule of reason’s balancing test. Given that the rule of reason is often said to be at the center of antitrust law, and that balancing is at the heart of the rule of reason, it is quite surprising to discover that courts almost never do any actual balancing of harms and benefits. Indeed, balancing has become so rare that in the Supreme Court’s two most recent articulations of the rule of reason test, it omitted the actual balancing of anticompetitive harms and procompetitive benefits altogether! In so doing, the Court—seemingly unwittingly—took sides in a circuit split over the test for the rule of reason, choosing a three-step, burden-shifting approach without balancing over the four-step approach some courts have articulated and the different three-step approach other circuits have applied, each of which includes balancing. But the Court did so without acknowledging that there was any such divide, much less that it was resolving the disagreement, and it did so in dictum, in cases that didn’t require it to determine what the test actually was. The result has been confusion. The Ninth Circuit recently articulated a four-step test for the rule of reason notwithstanding NCAA v. Alston.13 Other circuits have disagreed. But none of the circuits that omit the balancing inquiry have confronted the fundamental oddity of a “rule of reason” that turns out, in their formulation, to be all rule and no reason. In this Article, we argue that the proper test for antitrust’s rule of reason is a four-step, burden-shifting framework that ends with a balancing of the likely harms and benefits of particular conduct. Only a test that includes balancing can offer the reason the rule of reason promises.