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A Premature Postmortem on the Chicago School of Antitrust

Published online by Cambridge University Press:  20 January 2020


The Chicago School of antitrust is often thought to have killed off antitrust enforcement beginning in the late 1970s. In fact, although Chicago school prescriptions were significantly more laissez-faire than the structuralist school Chicago replaced, antitrust enforcement did not die under Chicago's influence. Rather, by directing antitrust to focus on technical economic analysis, Chicago contributed to the creation of a large and entrenched class of antitrust professionals—economists and lawyers—with a vested interest in preserving antitrust as a legal and regulatory enterprise. Today, Chicago School's consumer welfare standard and specific enforcement prescriptions are coming increasingly under political pressure and may be replaced or supplemented in the near term. But Chicago's redirection of antitrust toward technical economic analysis and technocratic reasoning seems likely to remain a durable legacy.

Research Article
Copyright © The President and Fellows of Harvard College 2020

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1 Open Markets was affiliated with the left-leaning New America Foundation, until forced out over Open Markets's criticisms of Google, a New America patron. Kenneth P. Vogel, “Google Critic Ousted from Think Tank Funded by the Tech Giant,” New York Times, 30 Aug. 2017,; U.S. House of Representatives Democratic Leadership, “Crack Down on Corporate Monopolies and the Abuse of Economic and Political Power,” in A Better Deal: Better Jobs, Better Wages, Better Future (Washington, DC, 2017),

2 See Crane, Daniel A., “Antitrust's Unconventional Politics,” Virginia Law Review Online 104 (Sept. 2018): 118–35Google Scholar.

3 Daniel Kishi, “Robert Bork's America,” The American Conservative, 1 Mar. 2018,

4 For a fuller treatment of the many schools of thought contributing to the formation of U.S. antitrust policy, see Crane, Daniel A. and Hovenkamp, Herbert, The Making of Competition Policy: Legal and Economic Sources (Oxford, 2013)CrossRefGoogle Scholar.

5 See Hawley, Ellis W., The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence (New York, 1995)Google Scholar.

6 Louis D. Brandeis, “The Curse of Bigness,” Harper's Weekly, 10 Jan. 1914, 18.

7 Louis Brandeis, “Shall We Abandon the Policy of Competition?,” in Crane and Hovenkamp, Making of Competition Policy, 185. On Brandeis's influence in antitrust, see Kenneth G. Elzinga and Micah Webber, “Louis Brandeis and Contemporary Antitrust Enforcement,” Touro Law Review 33, no. 1 (2017): 277–321.

8 See Jeffrey Rosen, “The Curse of Bigness,” The Atlantic, 3 June 2016 (summarizing Brandeisian vision).

9 United States v. Columbia Steel Co., 334 U.S. 495, 525 (1948) (Douglas, J., dissenting).

10 See Robert Pitofsky, “The Political Content of Antitrust,” University of Pennsylvania Law Review 127 (1979): 1051–75.

11 See, for example, Hawley, The New Deal (detailing place of Brandeisian School among prevailing New Deal ideologies).

12 Chicago Board of Trade v. United States, 246 U.S. 231 (1918); United States v. TOPCO Associates, 405 U.S. 596 (1972).

13 See Leonard W. Weiss, “The Structure-Conduct-Performance Paradigm and Antitrust,” University of Pennsylvania Law Review 127 (1979): 1104–40; Herbert Hovenkamp, “United States Competition Policy in Crisis: 1890–1955,” Minnesota Law Review 94 (2009): 350–54.

14 At a theoretical level, structuralism rested on four broad theoretical and empirical propositions. First, the structuralists assumed a strong link between the number of firms in a market and the propensity of prices to rise above cost. This claim rested principally on strong assumptions, formalized by nineteenth-century French mathematician Augustin Cournot, that oligopoly behavior would increase as the number of firms decreased. The structuralists claimed that the Cournot assumptions were borne out by empirical studies showing that firms in concentrated industries earned higher profits than those in more competitively structured industries. Second, echoing a theme from Louis Brandeis, the structuralists rejected the notion that large aggregations of capital were necessary to achieving economies of scale. While economies of scale did exist, in many markets the firms were far larger than minimum efficient scale demanded; such markets could be “deconcentrated” by breaking up large firms without causing significant production inefficiencies. Third, the structuralists claimed that barriers to entry were high in many industries, but particularly in those with a large fixed cost component. The Harvard School's broad definition of entry barriers would raise a strong challenge from the Chicago School, which gave a much narrower definition to entry barriers—with the implication that far fewer markets would be considered difficult to enter. Fourth, Kaysen-Turner argued that, given the close link between Cournot theory and maximizing behavior, poor performance in highly concentrated markets was inevitable. As a result, antitrust should focus on structure and pay relatively less attention to conduct.

15 U.S. v. Pabst Brewing Co., 384 U.S. 546 (1966).

16 U.S. v. Von's Grocery Co., 384 U.S. 270 (1966).

17 John Harkrider, “Proving Anticompetitive Impact: Moving Past Merger Guidelines Presumptions,” Columbia Business Law Review 2005 (2005): 333.

18 Herbert Hovenkamp, “Introduction to the Neal Report and the Crisis in Antitrust and a Reprint of the Neal Report,” Competition Policy International 5, no. 1 (2009): 217–39.

19 Hovenkamp, “Introduction to the Neal Report.”

20 Herbert Hovenkamp, The Antitrust Enterprise: Principle and Execution (Cambridge, MA, 2005), 37.

21 William E. Kovacic, “The Intellectual DNA of Modern U.S. Competition Law for Dominant Firm Conduct: The Chicago/Harvard Double Helix,” Columbia Business Law Review 2007 (2007): 1–80.

22 See Daniel A. Crane, “linkLines’ Institutional Suspicions,” Cato Supreme Court Review 2008–2009 (2009): 111–32.

23 George J. Stigler, “The Organization of Industry: A Note on Profitability, Competition, and Concentration,” in Crane and Hovenkamp, Making of Competition Policy, 393–96; see also Harold Demsetz, “Two Systems of Belief about Monopoly,” in Harvey J. Goldschmidt and H. Michael Mann, eds., Industrial Concentration: The New Learning (New York, 1974), 164 (finding that small firms in concentrated industries did not earn supracompetitive profits, as predicted by structuralists); and Lester G. Telser, “Another Look at Advertising and Concentration,” Journal of Industrial Economics 18 (1969): 85–94 (critiquing alleged correlations between advertising and market concentration resulting from methodological flaws).

24 See, for example, Frank H. Easterbrook, “The Limits of Antitrust,” Texas Law Review 63, no. 1 (1984): 6.

25 United States v. AMR Corp., 335 F.3d 1109, 1115 (10th Cir. 2003).

26 Kovacic, “Intellectual DNA”; Crane, “linkLine's Institutional Suspicions.”

27 See Robert Pitofsky, ed., How the Chicago School Overshot the Mark: The Effect of Conservative Economic Analysis on U.S. Antitrust (Oxford, 2008).

28 On Judge Posner's assertion that “Antitrust is dead, isn't it?,” see, for example, David Dayen, “This Budding Movement Wants to Smash Monopolies,” The Nation, 4 Apr. 2017,

29 Richard A. Posner, “Oligopoly and the Antitrust Laws: A Suggested Approach,” Stanford Law Review 21 (1969): 1575; Posner, Antitrust Law, 2nd ed. (Chicago, 2001), 217–23; Posner, “Vertical Restraints and Antitrust Policy,” University of Chicago Law Review 72 (2005): 235, 239–40; JTC Petroleum Co. v. Piasa Motor Fuels, Inc., 190 F. 3d 775 (7th Cir. 1999) (Posner, C.J.); General Leaseways, Inc. v. National Truck Leasing Ass'n, 744 F. 2d 588, 593–94 (7th Cir. 1984) (Posner. J.).

30 Posner, Antitrust Law, vii.

31 Pierre Larouche, “The European Microsoft Case at the Crossroads of Competition Policy: Comment on Ahlborn and Evans,” Antitrust Law Journal 75, no. 3 (2009): 962.

32 See Daniel A. Crane, “The Tempting of Antitrust: Robert Bork and the Goals of Antitrust Policy,” Antitrust Law Journal 79, no. 3 (2014): 835–53.

33 Crane, “Tempting of Antitrust.”

34 Robert Bork, The Antitrust Paradox (New York, 1978), 66, cited in Reiter v. Sonotone Corp., 442 U.S. 330, 343 (1979).

35 On resistance to Open Markets’ assault on the consumer welfare standard by traditionally left-leaning, pro-enforcement groups like American Antitrust Institute and New America Foundation, see Danny Vinik, “Inside the New Battle against Google,” Politico, 17 Sept. 2017,

36 Daniel A. Crane, “Technocracy and Antitrust,” Texas Law Review 86, no. 6 (2008): 1174–77.

37 William E. Kovacic, “The Modern Evolution of U.S. Competition Policy Enforcement Norms,” Antitrust Law Journal 71, no. 2 (2003): 378, 418–19.

38 Lawrence A. Sullivan and Ellen Hertz, “The AT&T Antitrust Consent Decree: Should Congress Change the Rules?,” High Technology Law Journal 5, no. 2 (1990): 238.

39 William F. Baxter, “Conditions Creating Antitrust Concern with Vertical Integration by Regulated Industries—‘For Whom the Bell Doctrine Tolls,’” Antitrust Law Journal 52, no. 2 (1983): 243–47; see Tim Wu, “Intellectual Property, Innovation, and Decentralized Decisions,” Virginia Law Review 92, no. 1 (2006): 139.

40 Parker v. Brown, 317 U.S. 341 (1943); Daniel A. Crane and Adam Hester, “State-Action Immunity and Section 5 of the FTC Act,” Michigan Law Review 115, no. 3 (2016): 365–411.

41 Crane and Hester, “State-Action Immunity” (arguing for more a preemptive role for the FTC Act over anticompetitive state regulations that harm competition and consumer welfare); Frank H. Easterbrook, “Antitrust and the Economics of Federalism,” in Competition Laws in Conflict: Antitrust Jurisdiction in the Global Economy, ed. Richard A. Epstein and Michael S. Greve (Washington, 2004), 189–213 (proposing modification to Parker immunity doctrine to curb excesses of state anticompetitive regulation); Easterbrook, “The Chicago School and Exclusionary Conduct,” Harvard Journal of Law and Public Policy 31 (2008): 446 (discussing Robert Bork's concern about use of government as agent of exclusion); Richard A. Epstein and Michael S. Greve, “Introduction: The Intractable Problem of Antitrust Jurisdiction,” in Epstein and Greve, Competition Laws in Conflict, 1, 13 (describing the Parker doctrine as enabling mutual exploitation of citizens by states).

42 Hofstadter, Richard, “What Happened to the Antitrust Movement?,” in The Paranoid Style in American Politics and Other Essays (Cambridge, 1966), 235Google Scholar.

43 Ghosal, Vivek and Sokol, D. Daniel, “The Evolution of U.S. Cartel Enforcement,” Journal of Law and Economics 57, no. S3 (2014): S51–65CrossRefGoogle Scholar.

44 Examples include the antitrust injury requirement (e.g., Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 [1977]; creating antitrust injury requirement that plaintiff demonstrate “injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful”) and limitations on private standing (e.g., Illinois Brick Co. v. State of Illinois, 431 U.S. 720 [1977]; prohibiting suit by “indirect purchasers,” i.e., those who did not purchase directly from the defendant).

45 Examples include Alexander Mackay and David Smith, “Empirical Effects of Minimum Resale Price Maintenance,” (Kilts Center for Marketing at Chicago Booth, Nielsen Dataset Paper Series 2-006, last revised 28 Aug. 2016), (finding that resale price maintenance tends to increase consumer prices); Elhauge, Einer, “Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory,” Harvard Law Review 123, no. 2 (2009): 397481Google Scholar (arguing that Chicago School tenets regarding the unprofitability of anticompetitive tying have been falsified); and Bolton, Patrick, Brodley, Joseph F., and Riordan, Michael H., “Predatory Pricing: Strategic Theory and Legal Policy,” Georgetown Law Journal 88 (2000): 2239–50Google Scholar (arguing that the Chicago School erred in assuming that predatory pricing was rare or too risky to be attempted).

46 U.S. v. AT&T, Inc., 916 F. 3d 1029 (D.C. Cir. 2019).

47 Crane, “Antitrust's Unconventional Politics.”

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