Antitrust, Regulatory Harm and Economic Liberty

Posted by Social Science Research Network

Antitrust, Regulatory Harm and Economic Liberty– Alan J. Meese (William & Mary Law School)

Abstract: This essay responds to a recent article by Thomas Nachbar advocating a “constitutional” approach to antitrust law. Nachbar contends that the Sherman Act mirrors the Constitution’s own prohibition on legislative delegation of coercive regulatory authority to private parties. As a result, Nachbar says, courts should ban contracts and other conduct that restrain liberty and produce what he calls “regulatory harm,” just as courts invalidate such legislative delegations as deprivations of liberty without due process of law. To implement this “constitutional” approach, Nachbar offers a common sense distinction between economic conduct that is “proprietary,” on the one hand, and that which is “regulatory,” on the other. The former, he says, entails a firm’s disposition of its own property, including price-setting, while the latter entails tying contracts and other agreements that by their terms restrict the manner in which trading partners deal with their own property. While some conduct falls clearly into one category or the other, much lies somewhere on a spectrum between the two. Nachbar advises courts to identify conduct that is unduly regulatory by measuring the distance between the ownership of a defendant’s property, on the one hand, and the control exercised by the restraint, on the other.