The Evolution of Sherman Act Case Law: A Roadmap for Competitive Federalism

74 Pages Posted: 10 Dec 2003  

D. Bruce Johnsen

George Mason University - School of Law; PERC - Property and Environment Research Center

Moin A. Yahya

University of Alberta - Faculty of Law

Date Written: November 2003

Abstract

For the first time in over six decades, recent Supreme Court decisions confirm that federal regulatory authority under the Commerce Clause truly is limited. These decisions coincide with an increasing appreciation among scholars and jurists for the concept of competitive federalism. This paper derives the implications of competitive federalism for federal antitrust jurisdiction under the Sherman Act. It provides a clear and substantively reasoned jurisdictional test based on the concept of geographic market power familiar to antitrust scholars, practitioners, and regulators in evaluating horizontal mergers. According to this test, to be subject to federal antitrust jurisdiction Sherman Act defendants must have a sufficiently large share of the geographic antitrust market that they can plausibly exercise market power that has a substantial effect on prices "in more states than one." This test reflects a natural progression in the evolution of Sherman Act and Commerce Clause jurisdiction. It resolves a number of troubling inconsistencies in the case law and also provides a useful roadmap for the direction the Court's general Commerce Clause jurisprudence might take in other areas of federal regulation.

Keywords: competitive federalism, antitrust, legal evolution, geographic markets

JEL Classification: K21, K23, L11, L41, L43

Suggested Citation

Johnsen, D. Bruce and Yahya, Moin A., The Evolution of Sherman Act Case Law: A Roadmap for Competitive Federalism (November 2003). George Mason Law & Economics Research Paper No. 03-54. Available at SSRN: https://ssrn.com/abstract=469962 or http://dx.doi.org/10.2139/ssrn.469962

D. Bruce Johnsen (Contact Author)

George Mason University - School of Law ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8066 (Phone)
703-993-8088 (Fax)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Moin A. Yahya

University of Alberta - Faculty of Law ( email )

Edmonton, Alberta T6G 2H5
Canada
780-492-4445 (Phone)
780-492-4924 (Fax)

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