Vanderbilt Law Review


Nolan E. Clark

First Page



Antitrust law has been with us since 1890, the year that Congress passed the Sherman Antitrust Act. In the course of this ex-tended period, antitrust law has achieved an exalted status in the pantheon of American jurisprudence.' Nevertheless, for decades,Sherman Act doctrines have been murky and confused. This confusion was not, however, historically inevitable. When enacted, the Sherman Act had a clear focus. Fortunately, as the Sherman Act approaches its centennial, the Supreme Court has given encouraging signs that it is once again returning to the original focus of the statute.

As originally conceived, the Sherman Act prohibited two related offenses. Section 2 prohibited monopolization." Section 1, the more important provision, prohibited combinations in restraint of trade. As this Article demonstrates, section 1 originally proscribed one, and only one, offense: cartelization, agreements amongcompetitors to restrict their output.

The Supreme Court's failure to limit section 1 to a clearly articulated cartelization standard casts a shadow on the Sherman Act's original clarity. Instead of utilizing a specific cartelization standard, the Court judged challenged conduct under an unfocused"Rule of Reason" standard. Applying this standard, the Court found a variety of conduct having little or no relation to classic cartelization to violate section 1. The Court declared illegal any business arrangement that it deemed an "unreasonable" restraint on competition. Unlike cartelization, the concept of unreasonable restraint of competition is so ambiguous that the Rule of Reason doctrine proved to be inherently amorphous.

The Court's substitution of a Rule of Reason standard in place of the cartelization standard that was contemplated by the language of the statute introduced an ambiguity to antitrust jurisprudence that eventually led to an almost total lack of coherence and consistency in section 1 case law.'" Hostility to this growing confusion eventually provided the basis for a recent antitrust revolution whose dimensions are still not fully and accurately understood.The vanguard for this revolution came from academia. Beginning in the 1950's, the so-called Chicago school," exemplified by the work of law school professors such as Robert Bork and Richard Posner,' expounded a simple thesis: the antitrust laws should be interpreted as having only one goal, to promote the maximization of consumer welfare by invalidating business arrangements that reduce economic efficiency.