Antitrust Liability for False Advertising: A Response to Carrier & Tushnet

Abstract

This reply briefly considers when false advertising can give rise to antitrust liability. The biggest difference between tort and antitrust liability is that the latter requires harm to the market, which is critically dependent on actual consumer response. As a result, the biggest hurdle a private plaintiff faces in turning an act of false advertising into an antitrust offense is proof of causation – to what extent can a decline in purchase volume or other market rejection be specifically attributed to the defendant’s false claims? That requirement dooms the great majority of false advertising claims attacked as violations of the Sherman Act.

One important exception arises when the false statements are made in an institutional setting where truthfulness is mandated and reliance is naturally stronger. We offer the example of product disparagement in the pharmaceutical industry. Depending on the context false claims, particularly in a regulatory or adjudicatory setting, can lead much more reliably to harm.

Keywords: antitrust, monopolization, tort, false advertising, causation, administrative law