Reply to Winter’s Vertical Restraints and Antitrust Policy: A Reaction to Cooper, Froeb, O’Brien, and Vita

James Cooper, Luke Froeb, Daniel O’Brien, Michael Vita, Apr 01, 2006

In the Autumn 2005 issue of Competition Policy International, the authors published an article on the antitrust policy implications of the theoretical and empirical literature on vertical restraints. In an accompanying comment, Professor Ralph Winter claims that the authors are advocating an enforcement standard that in any particular case would ignore case-specific evidence of the restraint’s effects. Professor Winter also claims that the authors commit an analytical error in their discussion of how distortions in promotional incentives may motivate the use of resale price maintenance (RPM). Neither criticism is accurate. the authors agree with Professor Winter that individual cases should be judged on their own merits. The authors do argue, however, that the plaintiff’s burden in vertical restraints case should be high, and the authros place significant weight on both historical and case-specific empirical evidence. Professor Winter’s claim that the authors commit an analytical error in their discussion of promotional incentives also is incorrect.