Michael Swerdlow (American Antitrust Institute) has posted Resurrecting Section 3 of the Clayton Act, forthcoming in the University of Miami Law Review, Volume 81, Issue 1, on SSRN. Here is the abstract:
Section 3 of the Clayton Act (S. 3) was meant to supplement the Sherman Act with a more stringent prohibition of restrictive sales practices. The Supreme Court repeatedly held that S. 3’s text is unambiguous and rejects the Sherman Act’s rule of reason. Yet since the 1980s, lower courts have effectively nullified S. 3 by applying rule of reason analysis, treating S. 3 as superfluous to the Sherman Act. This shift, unsupported by empirical evidence, relied on Chicago and Harvard school scholarship that redefined the meaning of “competition” and argued for the unification of both statutes. This Article demonstrates that unification constitutes legal error. Much of modern Section 3 jurisprudence is irreconcilable with controlling Supreme Court precedent, statutory text, original public meaning, and legislative purpose. This Article proves these arguments through the first textualist analysis of Section 3 and a comprehensive catalogue of all nine S. 3 Supreme Court cases, 145 appellate decisions, and every district court S. 3 opinion from the last decade. From these sources, this Article synthesizes a faithful Section 3 liability test: competition is substantially lessened when a sales practice tends to extend a dominant position or substantially foreclose competition in any market. Enforcing Section 3 according to this test would restore a determinate prohibition on exclusionary sales practices, allowing intervention at their incipiency. Enforcing this statute would reduce litigation complexity and costs while enabling challenges to collectively harmful industry-wide practices absent proof of market dominance or conspiracy, all while preserving legal alternatives that achieve alleged efficiencies of restrictive sales practices.