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92 Tex. L. Rev. See Also 1 (2013-2014)

handle is hein.journals/seealtex92 and id is 1 raw text is: Texas Law Review See Also Volume 92 Response Detailed Analysis, not Catechism: A Comment on Crane's Bargaining over Loyalty Abraham L. Wickelgren* I. Introduction Daniel Crane's Bargaining over Loyalty argues that loyalty discounts are usually procompetitive, and that the conditions under which they can create anticompetitive effects typically do not obtain. This is fundamentally an empirical claim for which he does not provide any precise data to support. That said, whether this claim is true or false is not the critical issue. Rather, the critical issue is how relevant it should be for antitrust. Except for a few practices, such as horizontal price fixing, which are considered per se illegal, antitrust law examines the legality of most competitive practices under the rule of reason. Rule-of-reason analysis entails a detailed examination of the facts of the particular case at hand in order to determine whether the practice in question is pro- or anticompetitive (in this particular case). Just as the fact that driving is socially desirable almost all the time tells us very little about whether a particular driver was reckless in any given instance, finding that a practice such as a loyalty discount is procompetitive (anticompetitive) in one case, given one set of competitive conditions, does not mean that it is necessarily procompetitive (anticompetitive) in another case under a different set of competitive conditions. This means that even a conclusive determination that loyalty discounts are procompetitive, say, 87 percent of the time they are used is of little use in deciding whether the use of loyalty discounts in any given case is pro- or anticompetitive. First, there is not a precise, generally accepted definition of * Bernard J. Ward Centennial Professor of Law, The University of Texas School of Law. I thank Einer Elhauge for very helpful comments. All errors are my own.

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