Kimball Corson — How and Why Did the Antitrust Laws Disappear?

It started with a law professor I had at Chicago. Richard Posner re-read Sec 1 of the Sherman Act to say it literally only protected competition and it did not protect competitors as everyone then supposed, except as absolutely necessary to protect competition, which was view too narrowly as just price competition. Sec 1, adopted back in the 1890's reads:

"Every contract, combination in the form of trust or otherwise, or conspiracy, in [unreasonable] restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal."

(The "unreasonable" limitation was added by judicial gloss and no one disagrees with that.) 

So then, what do we need to have competition under Sec 1, Posner asked. The conclusion he and other Chicagoans reached was it was enough if say two or a few competitors with sizeable market share apparently competed as to price. That was enough to have sufficient competition. It was therefore alright if those few large competitors engaged in anticompetitive acts toward smaller competitors and put them out of business. The apparent competition between big boys was enough to preserve and protect competition. The Sherman Act was not concerned with more....

Wandering the Oceans
How and Why Did the Antitrust Laws Disappear?
Kimball Corson