Rule of Reason in Antitrust Cases

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Rule of Reason in Antitrust Cases

Category: Critical Thinking

Subcategory: Economics

Level: University

Pages: 1

Words: 275

Rule of Reason in Antitrust Cases
The rule of reason court ruling principle should guide anti-trust cases other than the per se rule. Anti-trust cases deal with unfair market competition practices done by business people. To identify that a business act leads to unfair completion, analysis of its effect on the market should be done. Per se principle does not give room for a review of the economic impact of a business practice in a market. Most market practices are not done with the intention of unfair competition. For example, in price fixing, two companies may agree on a fixed price to avoid price wars. In such a case, the intention is not to prevent other businesses from establishment or harm the consumers but to have fair market competition on other properties like quality other than price (Ahamat & Nasarudin 3). The rule of reason can identify the intention of the practice before a ruling is delivered but per se does would rule on fixed assumption.
A fair business activity to the economy is relative. Some unfair market practices are healthy for the economy. The government in some instances advocates for discriminatory practices in strategic businesses which they find to have more benefits to people although they interfere with the market systems (Ahamat & Nasarudin 2). An example is where the cost of production of a commodity becomes low when there is one big producer like electric power production. In such a case flexibility…

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