A New Structured Rule of Reason Approach for High-Tech Markets

Abstract

Applying the per se illegality doctrine for years has proven to be a mistake. The challenge is now to avoid committing the same error by applying per se legality for practices related to the New Economy — notably predatory innovation. This Article then advocates for eliminating per se legality as it relates to innovation issues that stem from ideologies rather than particular facts.

Avoiding general per se rules does not mean, however, that we should apply a general rule of reason. Frank H. Easterbrook’s findings demonstrate how filters can create an efficient error-cost framework, but his findings are not well suited for the practices related to the New Economy. This Article proposes implementing a newly structured rule of reason tailored for innovation issues and based on three filters that will suit contemporary antitrust law issues and would considerably improve antitrust law and economic analysis in the long run, while also avoiding false positives.

Keywords: Rule of Reason, per se Rules, Innovation, Antitrust, Estearbrook, Structure Rule of Reason

JEL Classification: K21