Comment: The Rule of Reason and Horizontal Restraints Involving Professionals
28 Pages Posted: 22 Jan 2001 Last revised: 16 Jul 2009
Date Written: 2000
Some commentators contend that professional self-regulation should be treated much more leniently than horizontal restraints in other industries because professional service markets differ substantially from other markets. Specifically, they argue that all professional restraints should be entitled to the full-fledged rule of reason analysis, which, as the Comment discusses, rarely hands plaintiffs a victory. They will, hereafter, no doubt invoke California Dental Association v. FTC, 119 S.Ct. 1604 (1999), in support of their argument. Though the implications of the rather ambiguous opinion are far from clear, given the Court's expansive discussion of the uniqueness of professional markets, it is quite possible that CDA's analysis may well extend beyond the issue of professional advertising restrictions to reach all horizontal arrangements involving professionals. As discussed in this Comment, this would effectively insulate virtually all professional restraints (except perhaps naked price fixing agreements) from antitrust liability. In view of this possibility, the Comment examines the main characteristics distinguishing professional from other markets, namely, informational asymmetries and "quality" considerations, and concludes that they do not call for a different rule of reason standard for analyzing the legality of professional self-regulation. The principal argument that is made here is not that professional self-regulation is almost always suspect, but merely that the contrary view is also not true - that self-regulation is not always, or even almost always, procompetitive. Thus, the risk in having the CDA standard govern in all except direct price fixing cases is that many anticompetitive professional restraints may go unpunished. Indeed, most such restraints would be shielded from serious antitrust scrutiny. The Comment argues that the antitrust analytical framework for determining the legality of horizontal restraints in general is flexible enough to take into account the distinguishing characteristics of professional services, and that contemporary antitrust standards applicable in general cases are just as appropriate in the professional context.
JEL Classification: K21
Suggested Citation: Suggested Citation