Rethinking Antitrust Damages

25 Pages Posted: 29 Jan 2003

Abstract

Antitrust law currently lacks a unified theory of liability and damages. The Supreme Court's acceptance of consumer welfare as the goal of antitrust law underscores a growing judicial inclination to construe antitrust liability rules to encourage efficient production and efficient resource allocation. As the Court reconstructs the law of antitrust liability, it should also revise the law of antitrust damages by defining the rights created by those damage measures to accomplish specific economic goals.

Part I analyzes the consumer's economic injury from exploitative behavior and shows that, prevailing contrary opinion notwithstanding, the Clayton Act does not unambiguously establish a consumer right to be free from such injury. Because the prevailing interpretation may cause allocative inefficiency, Part I proposes a countervailing producer's right and a corresponding damage rule. Part II analyzes the kind of injury that competitors suffer from expansionary behavior. It criticizes the competitor's right suggested by the current damage rule and proposes an alternative right and damage rule that would improve social welfare by enhancing productive efficiency. Part III proposes implementing the economic rights suggested in Parts I and II through a judicial test for calculating antitrust damages that would restrict the availability of such damages.

JEL Classification: K00, K14, K21, L2, L4, L41, L5

Suggested Citation

Sidak, J. Gregory, Rethinking Antitrust Damages. Stanford Law Review, Vol. 33, pp. 329-352, 1981. Available at SSRN: https://ssrn.com/abstract=310604 or http://dx.doi.org/10.2139/ssrn.310604

J. Gregory Sidak (Contact Author)

Criterion Economics, L.L.C. ( email )

1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)

HOME PAGE: http://www.criterioneconomics.com

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