No abstract

No abstract

or more than a century, the United States has used antitrust law in an effort to control business behavior by forcing firms to compete. The same era that gave birth to antitrust law also witnessed the creation of the business school. In what must constitute one of the legal system's biggest ironies, however, antitrust law has largely ignored the insights of business theory and scholarship, choosing instead to focus on economics as a sister discipline. As the brand of economics used by antitrust law shifted from Harvard School industrial organization to Chicago School price theory, courts, policymakers, and antitrust legal scholars increasingly attempted to force the facts of actual business behavior to fit into a simplistic framework that explained all conduct as a rational attempt to maximize profits. During its first 85 years, antitrust law addressed three harms to competition: (1) the loss of a level playing field for competitors, (2) the exclusion of competitors from access to markets, and (3) the loss of consumer welfare (see Fox 2002). The hard form of price theory advocated by Chicago School adherents, however, refused to acknowledge any type of injury to competition other than consumer welfare losses. As the Chicago School influence reached its zenith during the Reagan Administration, concerns began to surface about the "Faustian Pact" of antitrust law and economics (Rowe 1984). Business scholarship has drawn increasing attention in the search for an alternative or, at least, a complementary approach to economics that could account for both the actual behavior of businesses and the harms to competition beyond consumer welfare loss (Waller 2001). Business schools house a rich variety of disciplines. It is no more likely that any one discipline holds the key to antitrust law than it holds the key to successful business operations. Nonetheless, strategic management, similar to marketing, offers a particularly good source of insights for antitrust law because it focuses on the actual behavior of firms in markets. Thus, even Chicago School proponents such as Posner (1979, p. 939) have suggested that strategic management may yield important insights for antitrust law.

For most of the last half century, economic concepts of efficiency have dominated antitrust law and competition policy. Debates have largely centered around how to apply these concepts to specific types of business conduct, for example, whether a particular merger is efficient or a particular action will exclude equally efficient competitors from the market, while concerns about market structure have largely receded into the background. Business scholarship and practice, however, have begun to place an increasing emphasis on sustainability. Sustainability not only challenges the basic assumption of efficiency analysis that firms rationally pursue profit maximization, sustainability also suggests that overreliance on efficiency may be a trap that renders markets less resilient and more prone to collapse in the face of abrupt changes. Growing concern about the fragility of supply chain networks provides a case in point. To avoid the efficiency trap requires consideration of both efficiency and resilience.

As automobiles have become more durable and complex, manufacturers have denied access to parts, information, and training to anyone but authorized dealers. Increased intellectual property law protection has greatly contributed to these developments. This article examines the aftermarket for collision repair parts and the aftermarket for maintenance and repair services, and finds that problems such as consumer myopia and third-party payers keep consumers from factoring the total cost of ownership into the price of an automobile. Even robust competition in the primary market for new automobiles may not inhibit manufacturers from reaping monopoly profits in these aftermarkets. Potential solutions to these issues in the aftermarket for maintenance and repair services may be found in mandating access for independent service providers. In the aftermarket for collision repair parts, a potential solution may be found by creating an exception to design patent law for third-party collision repair parts.