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Rule of Reason vs Per Se

Rule of Reason vs Per Se - per se analysis o See...

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Rule of Reason vs. Per Se Rule of Reason Most restraints are analyzed under a ROR analysis Procedure o (1) define the relevant market o (2) assess anticompetitive/efficiency effects o (3) Once market power and anticompetitive restraints are found, P has made out a prima facie case of illegality o (4) D can rebut this by proving either a legitimate business justification or efficiency benefit for its conduct o (5) If D rebuts the prima facie case, the burden shifts back to P to show that the same justification/benefit could have been attained by some less restrictive alternative Per Se Per se cases do NOT require an elaborate investigation into market power or the precise reasons for the conduct in the particular case Per se treatment is appropriate when the conduct is almost always anticompetitive and almost never socially beneficial o It is a rule of administrative convenience Price-affecting conduct This will generally be viewed under per se analysis o See Socony (“any combination formed for the purpose and w/ the effect of
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Unformatted text preview: per se analysis o See Socony (“any combination formed for the purpose and w/ the effect of raising, depressing, fixing, pegging, or stabilizing price…is illegal per se”) • Maximum price fixing b per se illegal o See Arizona v. Maricopa County Medical Society o This case has been CRITICIZED • Exceptions o BMI-type situations s Clearly, BMI involved ‘price-affecting conduct’ but it was a ROR case s The exception will be contingent upon a showing that the conduct at issue actually reduces price or increases output Overall Guidelines • If the agreement involves competitors (i.e., it is horizontal) b is may be a per se case • If the agreement does not involve competitors (i.e., it is vertical) b ROR (unless it involves resale price maintenance or tying) • If cooperation of competitors is necessary to make the product at all b likely ROR o See e.g., NCAA • Exchanges of price information b ROR www.swapnotes.com...
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