III. THE TRUNCATED OR "QUICK LOOK" RULE OF REASON
Corresponding to the evolution of per se analysis to take greater account of procompetitive business justifications has been the recognition that the line between per se and rule of reason analysis often is not "bright."(107) Increasingly, courts and analysts have come to understand that sometimes the rule of reason may be applied "in the twinkling of an eye."(108) The pattern that has evolved, therefore, is "less a dichotomy than a continuum."(109)
Two general approaches for blending per se and rule-of-reason analyses into a "truncated" or "quick look" rule-of-reason have emerged. One preserves the per se rule's presumption of likely competitive harm as a basis for plaintiff's prima facie case unless and until defendants can demonstrate by argument and evidence a procompetitive business justification. The other employs a "flexible enquiry" examining likely anticompetitive effects, market power, and efficiencies to the degree necessary to understand a challenged restraint's competitive consequences.(110) Each approach is discussed in turn.
A. Truncation Presuming Competitive Harm from the Nature of the Restraint and Requiring Demonstration of Procompetitive Justifications
1. Judicial Sources
One quick-look technique deriving directly from per se principles employs mechanisms suggested in NCAA and Indiana Federation of Dentists. In keeping with the per se rule, this approach continues to presume competitive harm from the very nature of the challenged conduct, so that plaintiffs need not demonstrate market power or specific anticompetitive effects to establish their prima facie case. However, rather than deeming the presumption of competitive harm to evaporate and invoking the traditional, full-blown rule of reason upon presentation of a potentially legitimate business justification, the Court in NCAA and Indiana Federation of Dentists preserved the presumption of competitive harm long enough to inquire whether justifications had been demonstrated in fact. Finding that they had not, the Court condemned the challenged conduct.
Thus, in NCAA the Court reasoned that the challenged television plan, by its nature as a restraint on price and output, had significant potential for anticompetitive effects. Anticompetitive consequences were "apparent": output was reduced, price was raised, and, most importantly to the Court, a price structure "unresponsive to consumer preference" was created. 468 U.S. at 104-08, 113. Rejecting the defense that there could be no anticompetitive effect because the NCAA lacked market power, the Court stressed:
As a matter of law, the absence of proof of market power does not justify a naked restriction on price or output. To the contrary, when there is an agreement not to compete in terms of price or output, "no elaborate industry analysis is required to demonstrate the anticompetitive character of such an agreement."(111)Instead, the Court required defendant to demonstrate "some competitive justification even in the absence of a detailed market analysis." Id. at 110. The Court rejected the proffered justifications, including assertions of marketing efficiencies and enhanced competitive balance that were evaluated, and found wanting, on their merits. Id. at 113-15, 117-20.
In Indiana Federation of Dentists the Court deemed a concerted refusal to supply x-rays to insurers for use in benefits determinations a "refusal to compete with respect to the package of services offered to consumers" and an impairment of the competitive market. 476 U.S. at 459. Declining to apply per se analysis to the rules of a professional association "imposed in the context of business relationships where the economic impact . . . is not immediately obvious," the Court instead used a quick-look version of the rule of reason and condemned the conduct without "elaborate industry analysis." Id. at 458-59. As in NCAA, plaintiff's affirmative case was curtailed, but defendant was permitted to present justifications:
Absent some countervailing procompetitive virtue -- such as, for example, the creation of efficiencies in the operation of a market or the provision of goods and services -- such an agreement limiting consumer choice by impeding the "ordinary give and take of the market place," cannot be sustained under the Rule of Reason.Id. at 459 (citations omitted). To the objection that the Commission needed to show market power, the Court responded that under NCAA the absence of market power does not justify a "naked restriction on price or output" and "such a restriction" requires some competitive justification even in the absence of detailed market analysis. Id. at 460. Even if the restriction at issue were not "sufficiently 'naked'" to invoke this principle, the Court continued, the fact that, as a result of defendant's efforts, insurers in some localities actually were unable to obtain patients' x-rays was legally sufficient to establish the Commission's case.(112) Finally, the Court found defendants' justifications both legally and factually flawed and concluded that even if, under certain circumstances, concern for quality of care could justify a restraint of the nature imposed, "the evidence did not support a finding" that careful use of x-rays was "in fact destructive of proper standards of dental care." Id. at 462-64.
Together, these cases establish that, when dealing with a "naked restriction on price or output," plaintiff's prima facie burden may be satisfied by a presumption of competitive harm from the very nature of the challenged conduct, even when per se analysis ought not to be applied. Both Supreme Court cases reject a need to establish market power, and at least Indiana Federation of Dentists also relieves plaintiff from the burden of showing specific anticompetitive effects when the restraint is "sufficiently 'naked.'"(113) Rather, the burden of coming forward with evidence shifts immediately to defendant to demonstrate, not merely to assert, a competitive justification. To the extent that the cases otherwise would have received per se treatment, truncation refines modern trends in per se analysis by requiring a closer examination of the proffered justifications. To the extent that the cases otherwise would have been evaluated under the rule of reason, truncation lightens plaintiff's burden through a willingness to find competitive harm in the very nature of the restraint, just as the per se rule presumes that certain conduct entails adverse effects.(114)
2. Determining When Truncation Applies
The Court has not been entirely clear in defining the circumstances under which truncation is appropriate. Confusion may have resulted from its use of language focused on whether a practice is sufficiently "naked." The Court could not have been using the term "naked" in its commonly employed sense of lacking a relationship to procompetitive benefits or to some other integration or agreement involving the same parties.(115) If that were the intended meaning, NCAA and Indiana Federation of Dentists would entail serious internal contradictions.(116)
More likely, the Court used the term "naked" to apply to agreements limiting competition on price or output. That interpretation flows directly from wording in NCAA,(117) and it frees both NCAA and Indiana Federation of Dentists from self-contradiction. It also fits the overall pattern of the Court's truncation analysis because it focuses the inquiry on whether conduct is of a type from which competitive harm may be presumed.
3. A Possible Synthesis
This interpretation immediately suggests a further issue: if truncation is to be applied to agreements limiting competition on price or output, how does the truncated rule of reason fit in with the per se rule, which obviously also covers agreements meeting that description? The answer may involve a synthesis of the two modes of analysis.
In essence the Court in NCAA and Indiana Federation of Dentists identified a block of conduct -- "naked" in the sense that it limits competition on price or output -- and provided a means for evaluating whether a relatively summary condemnation is appropriate or a full-blown rule-of-reason analysis is required, without need to delineate whether the conduct falls inside or just outside traditional per se boundaries. In either case, plaintiff's prima face burden is satisfied through the presumption of competitive harm flowing from the nature of the conduct, and the conduct can be summarily condemned absent a demonstration of some competitive justification.(118)
An analysis employing this synthesis would ask first whether a restraint by its nature can be presumed to harm competition. In other words, it would ask whether a restraint is of a type traditionally condemned as per se unlawful or is so seriously anticompetitive that it becomes a candidate for truncated treatment. The inquiry might be whether the restraint limits competition on price or output or some variant thereof, as discussed infra in Section III.A.4, so long as the language identifies conduct within or sufficiently close to current per se boundaries to support the necessary presumption of competitive harm. If the first test is satisfied, the second issue would be whether defendant has presented competitive justifications that viewed facially, on argument alone, appear legitimate. If not, the conduct would be condemned, just as under modern per se analysis.(119) If the second test is satisfied, the third inquiry would be whether the competitive justifications can be sustained as a matter of fact. This completes the evaluation of asserted efficiencies while keeping in place the initial presumption of competitive harm.(120) If the third test is not satisfied, the conduct would be condemned. However, if a competitive justification is demonstrated and no less anticompetitive alternative is readily available, the presumption of competitive harm from the nature of the conduct would evaporate, and the fourth inquiry would require plaintiff to establish market power or demonstrate specific anticompetitive effects.
This synthesis has not yet been employed by the lower courts, which frequently have shied away from applying quick-look techniques.(121) Some courts have suggested that truncation might best be confined to situations that would otherwise have been subject to per se condemnation, but where for some reason there is hesitation in invoking a per se proscription.(122) That cabining of the doctrine, however, seems to rest on pre-BMI conceptions of the per se rule as excluding consideration of business justifications. To the extent that modern per se analysis already inquires whether there are facially plausible competitive justifications, a truncated rule of reason that evaluates justifications on the facts in many instances may prove less favorable to defendants than the per se rule. Moreover, under one view, the Supreme Court in NCAA and Indiana Federation of Dentists was seeking to remove artificial lines and distinctions, not to add to them by creating a tripartite division with separate realms for the per se, the truncated rule of reason, and the full rule of reason. Under that view, synthesis, not further categorization, was the goal, to the extent that it could be achieved with fidelity to per se principles.
4. The Mass. Board and Stepwise Analyses
The Commission's opinion in Massachusetts Board of Registration in Optometry, 110 F.T.C. 549 (1988), was an early effort to achieve such a synthesis.(123) Mass. Board identified the following series of questions to be asked in analyzing horizontal restraints:
First, we ask whether the restraint is "inherently suspect." In other words, is the practice the kind that appears likely, absent an efficiency justification, to "restrict competition and decrease output"? For example, horizontal price-fixing and market division are inherently suspect because they are likely to raise price by reducing output. If the restraint is not inherently suspect, then the traditional rule of reason, with attendant issues of market definition and power, must be employed. But if it is inherently suspect, we must pose a second question: Is there a plausible efficiency justification for the practice? . . . Such an efficiency defense is plausible if it cannot be rejected without extensive factual inquiry. If it is not plausible, then the restraint can be quickly condemned. But if the efficiency justification is plausible, further inquiry -- a third inquiry -- is needed to determine whether the justification is really valid. If it is, it must be assessed under the full balancing test of the rule of reason. But if the justification is, on examination, not valid, then the practice is unreasonable and unlawful under the rule of reason without further inquiry -- there are no likely benefits to offset the threat to competition.Id. at 604 (emphasis in original).
The analysis in Mass. Board grows out of NCAA and Indiana Federation of Dentists.(124) Under Mass. Board, inherently suspect restraints, like the Supreme Court's "naked" restrictions, unless justified by efficiencies, can be condemned without inquiring into market power or demonstrating specific anticompetitive effects. To invoke the traditional rule of reason, efficiencies must be both plausible on the arguments and valid under the facts. The Mass. Board methodology thus provides a structured analysis giving weight to certain conduct's readily apparent potential for competitive harm while ensuring that procompetitive business justifications, when in fact present, are fully considered.(125)
Mass. Board has been criticized as problematic in application. Much of the difficulty derives from its "inherently suspect" standard. Mass. Board's elaboration of this term, looking to whether "absent an efficiency justification" a practice "appears likely . . . to 'restrict competition and decrease output,'" quotes directly from BMI's per se rule. Despite its underpinnings in per se language, critics allege that Mass. Board's coverage was expanded in practice to reach conduct that could not support a presumption of competitive harm:
[O]bviousness of competitive harm is often in the eyes of the beholder, and once the competitive inquiry was untethered from rigorous market analysis, the "inherently suspect" label became a license to avoid the heavy lifting of analyzing markets and evaluating competitive effects . . . .In practice the term 'inherently suspect' was inherently elastic, being applied to a broad range of situations far outside the realm of per se or borderline per se conduct.(126)
As its reach extended, critics allege, the doctrine became increasingly unfair to defendants, who had to demonstrate not only that a practice entailed plausible efficiencies, but also that those efficiencies were in fact valid, before plaintiff needed to show market power or any anticompetitive effect.(127)
The Department of Justice also has utilized a quick-look analysis.(128) DOJ considers application of a truncated rule of reason in analyzing horizontal agreements "directly limiting competition on price or output that would have occurred but for the agreement."(129) If such an agreement is not per se illegal, DOJ inquires "whether there's a procompetitive justification for the agreement" and seeks factual evidence to support the claim. If the procompetitive justifications are unsubstantiated, the agreement is struck down. If there are significant procompetitive benefits, DOJ moves on to determine "whether [the agreement's] likely anticompetitive effects outweigh its procompetitive benefits." "[O]nly if there are real procompetitive benefits should there be any need to show actual anticompetitive effects."(130)
The "Stepwise Approach," like Mass. Board, flows from the analysis articulated in NCAA and Indiana Federation of Dentists. However, in place of Mass. Board's "inherently suspect"/"likely, absent an efficiency justification, to 'restrict competition and decrease output'" standard, the Stepwise Approach focuses on conduct "directly limiting competition on price or output that would have occurred but for the agreement." The difference is subtle, but the language of the Stepwise Approach tracks more closely the meaning of "naked" restraints employed in NCAA, and its explicit focus on "price or output competition" and on "direct[]" limitations may more successfully identify conduct that can be presumed harmful without a specific showing by plaintiff.(131)
In theory, the overall technique seems sound, but, as the Commission's experience with Mass. Board makes clear, any truncation methodology needs evaluation in the light of actual experience. If the formulation utilized in the Stepwise Approach, or any variant thereof, successfully identifies the appropriate fact patterns, the same thinking which underlies the per se rule -- the disutility of delaying condemnation when competitive harm is highly likely -- would justify truncation.(132) In contrast, if the formulation is too broad and picks up cases where competitive harms cannot appropriately be presumed, it becomes subject to the same criticisms as Mass. Board for permitting condemnation of practices without imposing plaintiff's normal prima facie burden.(133)
B. CDA and Flexible Truncation Analyses
The Commission took a different approach to truncation in its 1996 CDA I opinion.(134) In evaluating under the rule of reason the legality of various restraints on price and non-price advertising, the Commission conducted a "flexible enquiry, examining a challenged restraint in the detail necessary to understand its competitive effect." CDA I, slip op. at 25. The Commission looked first at anticompetitive effect. It found that the restraints hampered dentists in their ability to attract patients and deprived consumers of information that they valued and of competition for their patronage, so that "the anticompetitive nature" of the restraints was "plain." Id. at 25-28. The Commission then examined market power "to help inform [its] understanding of the competitive effect" of the restraints, and found that CDA had the power to withhold from consumers relevant information that they seek.(135) Finally, the Commission considered CDA's efficiency claims, found them inadequate to justify the broad limitations on advertising, and condemned the restraints. Id. at 32-28. The Commission's quick-look analysis was recently affirmed by the Ninth Circuit, which emphasized that "the scope of inquiry under the rule of reason is intended to be flexible depending on the nature of the restraint and the circumstances in which it is used."(136)
Flexibly structuring the analysis by varying the required level of detail depending on the degree of ambiguity in the evidence seems sound in theory and grounded in precedent. The goal, after all, is to understand a restraint's competitive effects, and the degree to which particular elements must be scrutinized in order to achieve that understanding may well differ depending on the factual setting. That principle underlies the NCAA/Indiana Federation of Dentists teaching that when a practice's anticompetitive character is apparent, no detailed industry study is required and leads to their conclusion that when the anticompetitive consequences of a practice are apparent, market power need not be proved. Commentators too have suggested flexibility and short-cuts. For example, Phillip Areeda's treatise indicates that "the degree of refinement necessary in the [proof of actual detrimental effects or their surrogate, market power] will vary with the seriousness of the type of restraint involved and with the tribunal's knowledge or reasonable suppositions about that industry."(137)
Even though sound in principle, however, questions remain as to whether the type of flexibility advocated in CDA offers sufficient guidance to business and adequate clarity in application to foster beneficial joint conduct and constrain litigation within appropriate channels. Examining a restraint "in the detail necessary to understand its competitive effect" provides a basic objective and a standard for testing results, but it is not an operative rule to which litigants (and potential litigants) would assign a common meaning. Broader experience in applying flexible truncation techniques may be needed for a sound understanding of their practical utility.
107. See Sylvania, 433 U.S. at 50 n.16.
108. NCAA, 468 U.S. at 104 n.26.
109. Id. at 110 n. 39, quoting Phillip Areeda, The "Rule of Reason" in Antitrust Analysis: General Issues 37-38 (Federal Judicial Center, June 1981).
110. Areeda, supra note 6, at ¶ 1508c.
111. Of course a flexible inquiry might aid defendants as well as plaintiffs. In settings where classical market power is essential for harm to competition, a quick determination that market power is absent may resolve the case quickly in defendant's favor. This paper, however, focuses on the truncation techniques that derive from principles related to the per se rule. Issues pertinent to market power screens have been raised in a prior staff discussion draft, see Michael S. McFalls, The Role and Assessment of Classical Market Power in Joint Venture Analysis (October 1997), and will be further considered in later phases of the Joint Venture Project.
112. NCAA, 468 U.S. at 109 (citation omitted). The Court found the telecast plan "inconsistent with the Sherman Act's command that price and supply be responsive to consumer preference" and concluded, "We have never required proof of market power in such a case." Id. at 110. Nevertheless, the Court proceeded to determine that the NCAA did in fact possess market power. Id. at 111-12.
113. Indiana Fed'n of Dentists, 476 U.S. at 460-61. "Since the purpose of the inquiries into market definition and market power is to determine whether an arrangement has the potential for genuine adverse effects on competition, 'proof of actual detrimental effects . . .' can obviate the need for an inquiry into market power, which is but a 'surrogate for detrimental effects.'" Id. at 460-61 (quoting Areeda, supra note 6, at ¶ 1511).
114. NCAA's handling of anticompetitive effects is less clear. Although the opinion finds the potential for anticompetitive effects apparent from the nature of the conduct, it also relies on District Court findings indicating that that potential had been realized. 468 U.S. at 104-08.
NCAA and Indiana Federation of Dentists are susceptible to diverse interpretations. For contrasting views of the Court's rulings in these cases, compare the five-judge en banc dissent in R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 890 F.2d 139, 164 (9th Cir. 1989) (finding no need for plaintiff to demonstrate either market power or actual detrimental effects under the Courts' truncation analysis), with the previously vacated, three-judge-panel opinion, R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 1987-2 Trade Cases (CCH) ¶ 67,691 at 58,572-73 (9th Cir. 1987) (reading both NCAA and Indiana Federation of Dentists to require that plaintiffs demonstrate a substantial adverse effect on competition), vacated, 841 F.2d 1010 (1988). (The majority en banc ruling derived from two separate opinions that did not directly discuss truncation.)
115. See CDA II, 1997 U.S. App. LEXIS 28882, at *18 (viewing the truncated rule of reason as applicable to cases that are "sufficiently anticompetitive on their face that they do not require a full-blown rule of reason inquiry"); Brown University, 5 F.3d at 669 ("competitive harm is presumed" under quick-look rule-of-reason analysis).
For a substantially different reading of the Supreme Court's handling of these issues, see M. Laurence Popofsky & David B. Goodwin, The 'Hard-Boiled' Rule of Reason Revisited, 56 Antitrust L.J. 195 (1987). These authors argue that the Court in NCAA merely intended to shift the burden to defendants to demonstrate an absence of market power:
[I]n horizontal "naked restraint" cases, the Court has subsumed the market power inquiry, if one is to be made, into the defendant's portion of the rule of reason analysis, not the plaintiff's prima facie case. . . . even when a "naked restraint" is involved, a showing of an absence of market power could be enough to justify rejection of the plaintiff's claim.Id. at 205. However, to the extent that competitive harm appropriately may be presumed from the very nature of the restraint, an analysis that condemns the conduct irrespective of market power, absent a showing of competitive justifications, lies much closer to the methodology's roots in the per se rule.
116. For examples of such usage, see, e.g., Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717, 729 (1988); Rothery, 792 F.2d at 224; 1988 International Guidelines § 3.0; Areeda, supra note 6, at ¶ 1510c; Hovenkamp, supra note 12, at 233.
117. The Court in those cases looked for procompetitive justifications only after finding that the restraint was naked. Indeed, NCAA termed the telecast restrictions naked despite stressing that the universities also cooperated through the NCAA in ways necessary for college football to be available at all. NCAA, 468 U.S. at 101-02.
118. See id. at 109 (rejecting in succeeding sentences the need to demonstrate market power or to engage in elaborate industry analysis in the context of (i) "a naked restriction on price or output" and (ii) "an agreement not to compete in terms of price or output").
119. Conduct with clear potential for competitive harm falls outside traditional per se boundaries when the likelihood of offsetting competitive benefits is too great to support per se treatment. A determination that such benefits in fact are absent eliminates the reason for withholding per se treatment.
120. Precise formulation of this phase of analysis -- involving such issues as connection to integrations or to efficiencies and relationship or necessity tests -- might depend upon how the questions posed supra in Section II are resolved.
121. The details of this phase of analysis, which assesses the factual basis for asserted justifications, would track the techniques employed in analyzing competitive benefits under the full rule of reason. Discussion of those techniques will be the topic of a subsequent paper.
122. See, e.g., Detroit Auto Dealers, 955 F.2d at 469-72. Compare American Ad Management, Inc. v. GTE Corp., 92 F.3d 781, 789-90 (9th Cir. 1996) (emphasizing that "'quick look' analysis is the exception, rather than the rule") with CDA II, 1997 U.S. App. LEXIS 28882, at *18-21 (finding that the Commission properly applied a quick-look analysis in evaluating restraints on price and nonprice advertising).
123. Thus, U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d 589, 595 (1st Cir. 1993), observes that the Supreme Court has tended to apply the approach in "unusual contexts (an interdependent sports league in one case; medical care in the other)," where the Court was hesitant to strike down arrangements as per se illegal without considering justifications. The opinion described NCAA and Indiana Federation of Dentists as "contract[ing] the per se rule." Id. at 594-95. Similarly, Lie v. St. Joseph Hospital, 964 F.2d 567, 569 (6th Cir. 1992), described truncation as lessening the burden on plaintiff "when the agreement at issue is very similar to per se violations and might, but for prudential constraints, be analyzed under the per se presumption." As discussed infra in Section III.B, CDA II suggests broader applicability for a more flexible truncation analysis.
124. See Timothy J. Muris, The New Rule of Reason, 57 Antitrust L.J. 859, 861 (1989) (suggesting that the Mass. Board approach effectively replaced per se analysis). The Commission, however, has subsequently affirmed its recognition and endorsement of separate per se and rule-of-reason analyses. CDA I, slip op. at 16, 38 n.26.
125. See CDA I, slip op. at 2 (Comm'r Starek, concurring in part and dissenting in part) (arguing that Mass. Board analysis "faithfully synthesizes and applies the Court's post-BMI horizontal restraints jurisprudence").
126. Nonetheless, the Sixth Circuit's Detroit Auto Dealers ruling rejected the Commission's use of Mass. Board analysis in condemning a horizontal restriction of automobile dealers' working hours. 955 F.2d at 469-72 (affirming the Commission's conclusions in relevant part without accepting all aspects of its rationale). Judge Ryan, concurring, would have affirmed on the basis of Mass. Board analysis. Id. at 474-78.
127. Joseph Kattan, The Role of Efficiency Considerations in the Federal Trade Commission's Antitrust Analysis, 64 Antitrust L.J. 613, 624-25 (1996).
128. See id. at 615 (asserting that "enormous difficulties . . . can be associated with proving valid efficiencies"), 624 (arguing that a validity standard is "probably too stringent").
129. See Joel I. Klein, "A Stepwise Approach to Antitrust Review of Horizontal Agreements," Remarks before the American Bar Association's Antitrust Section Semi-Annual Fall Policy Program (November 7, 1996).
130. Id. at 5.
131. Id. at 7-8. More precisely, the Stepwise Approach assigns defendants the burden of "coming forward with significant evidence of procompetitive benefits," so that if that burden is satisfied, DOJ must either prove the absence of such benefits or move on to consider anticompetitive effects. Id. at 14.
132. The Stepwise Approach also differs from Mass. Board in that it very clearly preserves a separate per se analysis. Conduct is subject to the Stepwise Approach only when it is not per se unlawful. Klein, supra note 128, at 6-7. Accordingly, the synthesis of per se and truncation principles is not as complete as that suggested supra in Section III.A.3.
133. Cf. Detroit Auto Dealers, 955 F.2d at 475-76 (Ryan, J., concurring); Muris, supra note 123, at 864 ("The costs of [proving market power] are not worth the effort if we are confident that the approach . . . makes few mistakes. Because of the definition of inherently suspect . . . mistakes should indeed be few. When the collaborators cannot even offer a plausible efficiency justification for such a practice, we should lose little sleep over the prospect of mistakes.") (footnote omitted).
134. See, e.g., Statement of Howard H. Chang, David S. Evans, and Richard Schmalensee, "Some Economic Principles for Guiding Antitrust Policy Towards Joint Ventures" 83-86 (July 31, 1997); Testimony of William J. Kolasky, Jr., Tr. 87-88 (July 1, 1997); Testimony of James Rill, Tr. 111 (July 1, 1997); cf. Testimony of Joseph Kattan in Hearings on Global and Innovation-Based Competition, Tr. 1970-72 (Nov. 14, 1995) (arguing, in the context of discussion of Mass. Board, that "a market power screen is fundamental in all but the per se or maybe the near per se cases").
135. However, the Commission expressly refrained from overruling Mass. Board's truncation methodology, CDA I, slip op. at 38 n.26, and emphasized that it would have drawn the same conclusions had it used the Mass. Board framework. Id. at 38-39.
136. Id. at 28. Illustrating the flexible nature of its analysis, the Commission added, "Where the consequences of a restraint are ambiguous, or where substantial efficiencies flow from a restraint, a more detailed examination of market power may be needed." Id.
137. CDA II at *21, *18-28 (noting that "the Commission did not engage in a detailed analysis of market power" but concluding that "[g]iven the facially anticompetitive nature of both the price and non-price advertising restrictions, the evidence of the CDA's large market share and influence justifies finding a violation under the quick look rule of reason").
In contrast to its findings in CDA I, the Commission in AIIC, slip op. at 32, 35, determined that the competitive effects of various rules governing non-price terms and conditions of employment, business arrangements, and advertising were "not plainly anticompetitive " and "not obvious from the rules alone." The Commission rejected allegations concerning these rules on grounds that complaint counsel had failed to carry the burden of proof concerning market shares and market power and that anticompetitive effects were not revealed by the record. Id. at 35.