16 Geo. Mason L. Rev. 827 (2008-2009)
Rule of Reason: An Empirical Update for the 21st Century

handle is hein.journals/gmlr16 and id is 835 raw text is: 2009]

THE RULE OF REASON:
AN EMPIRICAL UPDATE FOR THE 21 ST CENTURY
Michael A. Carrier*
INTRODUCTION
One of the most amorphous rules in antitrust is the rule of reason. One
of the most important rules in antitrust is the rule of reason. One of the most
misunderstood rules in antitrust is the rule of reason.
Put together these three propositions and you have the making of real
trouble.
A decade ago, I showed that the rule of reason is far less amorphous
than commonly believed.' After reviewing all 495 rule of reason cases from
1977 to 1999, I showed that courts actually followed a burden-shifting ap-
proach.2
In the first stage, the plaintiff must show a significant anticompetitive
effect. The plaintiff's failure to make such a showing led to the courts' dis-
missal of 84% of the cases.' In the second stage, the defendant must dem-
onstrate a legitimate procompetitive justification; its failure to do so led to
invalidation of the restraint in 3% of the cases.
If the defendant satisfies this burden, the plaintiff can show that the re-
straint is not reasonably necessary or that the defendant's objectives could
be achieved by less restrictive alternatives. At most, 1% of the cases were
dismissed because the plaintiff made this showing. Only after the comple-
tion of these three stages does the court balance anticompetitive and pro-
competitive effects. Balancing occurred in 4% of the cases.6
* Professor, Rutgers University School of Law-Camden. I would like to thank Bill Kolasky for
the invitation to participate in the rule of reason panel at George Mason Law Review's Twelfth Annual
Symposium on Antitrust Law, Antitrust Policy in the New Administration, Dec. 4, 2008.
1 Michael A. Carrier, The Real Rule of Reason: Bridging the Disconnect, 1999 B.Y.U. L. REV.
1265, 1267.
2 Id. at 1269. The starting point of my survey was 1977, given the importance of Continental
TV., Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977), which held that courts are to consider vertical
nonprice restraints under the rule of reason. Id. at 59. GTE Sylvania has consistently been linked to the
beginning of antitrust's modem era. See, e.g., Robert H. Lande, Beyond Chicago: Will Activist Antitrust
Arise Again?, 39 ANTITRUST BULL. 1, 18 (1994); John E. Lopatka, Stephen Breyer and Modern Anti-
trust. A Snug Fit, 40 ANTITRUST BULL. 1, 24 (1995).
3 Carrier, supra note 1, at 1268.
4 id.
5 Id. at 1268-69.
6 Id. at 1269.

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