A Geographic Market Power Test for Sherman Act Jurisdiction
D. Bruce Johnsen
George Mason University - School of Law; PERC - Property and Environment Research Center
Moin A. Yahya
University of Alberta - Faculty of Law
George Mason Law & Economics Research Paper No. 02-032
This paper develops a clear and substantively reasoned test for Sherman Act jurisdiction based on the interstate exercise of market power. According to this test, to establish jurisdiction under the Act the plaintiff must allege that, if successful, the defendants' conduct is reasonably likely to raise prices "in more states than one." Local trade restraints that cannot plausibly be alleged to raise prices outside the home state therefore lie beyond the reach of the Sherman Act. The geographic market power test resolves a number of troubling anomalies in the case law on Sherman Act jurisdiction. It also takes seriously the Act's acknowledged goal of promoting consumer welfare and preserves the states' role as laboratories for political competition in our federal system of dual sovereignty.
Number of Pages in PDF File: 52
Date posted: December 13, 2002
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