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ABA Antitrust Section 48th Annual Spring Meeting, Chair's Showcase Program, Antitrust at the Millennium: Looking Back and Moving Forward
Washington, D.C.
Thomas B. Leary, Former Commissioner

I. Introduction

As moderator and first speaker in a program on "Antitrust at the Millennium: Looking Back and Moving Forward," I thought it would be useful to set the stage by focusing primarily on the "back" part, to see what it might signify for the future. What are the great ideas of the past millennium, which may be reflected in present and future antitrust policies? We were invited by our Chair to be speculative, subjective and controversial - - in short, to have a good time - - and the reader of this paper will probably conclude that interpretations of the past and present can be just as controversial as predictions of the future. In any event, I don't purport to speak for anyone else in the place where I work, and people who think these speculations foreshadow views on any particular case will risk, as the case may be, unnecessary worry or unfounded confidence.

Lists of "greatest" anythings are always suspect, but there are two fundamental ideas that most people would likely rank near the top in any survey of the last thousand years.

The first great idea is the principle that people should generally be free to choose their occupations based on their aptitudes and inclinations rather than their status at birth or political favoritism. People today are not expected to do the same work that their parents did, and sovereigns rarely grant private monopolies. Recognition of an individual's freedom to offer services or goods for sale has had a powerful impact on the development of law in this country, even though it has only very recently been applied across the full spectrum of our population. I will use the shorthand term "seller freedom" in this paper because this is the aspect of the idea that is most significant for antitrust purposes, with full recognition that it can have a much broader dimension.

The second great idea is the principle that people should generally(1) be free to make their own choices about the goods and services that they want to buy. The idea that people have an identity and rights as "consumers" is in some ways reciprocal to the idea of seller freedom, but evolved later because most people had so little disposable income before the Industrial Revolution. I will use the shorthand term "buyer freedom" in this paper to distinguish the concept, however marginally, from the term "consumer welfare" that is a lot more familiar to competition lawyers.

In the spirit of the occasion, and to stimulate controversy, I would like to advance the view that these two "freedoms" - - the freedom of producers to sell and the freedom of consumers to buy - - are today fundamental core values that inform antitrust law, as well as a vast body of other commercial laws. I would go further and argue that the core values of seller and buyer freedom are most likely to spread throughout the world and survive long into the next millennium, whether embodied in principles labeled "antitrust law," or something else. I do not deny that a case can be made for other core principles; I just happen to think that these are the ones that will be most important.

It is unlikely that any view of core values can be proven in a rigorous way. Legal scholars can read the same legislative history of the Sherman Act to support an antitrust regime based on the primacy of competition, allocative efficiency, "fairness," hostility to economic power, liberty of contract, wealth redistribution, or other political and social values.(2) In fact, it is highly unlikely that legislators in 1890 had a common view, or even various individual views, on these issues that are particularly useful or coherent in modern terms.(3)Moreover, antitrust has common law origins in times even further removed from the current debate. I suspect, however, that the framers of the Sherman Act valued and understood freedom far more than microeconomics.

I do not mean to diminish the critical importance of consumer welfare economics, which has revolutionized antitrust thinking in the last 25 years, and which has my ongoing enthusiastic support.(4) In fact, as discussed in greater detail below, economic analysis is directly related to a third great idea that emerged in the last millennium: the spirit of scientific inquiry. Economic analysis will continue to inform antitrust far into the future. However, economic analysis of consumer welfare effects may be better understood as a process, a methodology to mediate between conflicting buyer and seller claims of freedom, rather than as a core value in itself.

This may just look like a semantic exercise. Is there a real difference between a "core value" and a guiding principle for resolving conflicts, when the result in the vast majority of cases will be exactly the same? Admittedly, there may be an element of public relations at work here. As someone who believes in antitrust law and has practiced it for over 40 years, I am uncomfortable sailing into the next millennium under a banner that says something like:

"Recognizing that the model of perfect competition is nowhere found in the real world, we will nevertheless - - when intervention is appropriate - - favor solutions that most closely adhere to the model, unless there are offsetting economies of scale and scope, taking account of static and dynamic effects, by application of the most sophisticated analytical methods, which also change over time, etc., etc."

This is quite a mouthful and, besides, it doesn't really answer the basic question of "when intervention is appropriate."(5)

We do not live in a regulatory state, under the benign guidance of microeconomists. Antitrust offenses are not crimes of status; liability is triggered by conduct that a court finds offensive. This paper will argue that the offense typically involves an unjustified invasion of someone's freedom.

II. Specific Examples of the Principle

It may be interesting, as a thought experiment, to examine a number of current antitrust doctrines on the assumption that freedom is a core value.

A. Unilateral Conduct

Antitrust law does not condemn monopoly, despite adverse effects on allocative efficiency and consumer welfare. A seller who occupies a particular market niche, as the sole entrant or the most efficient survivor in a battle, can exploit its monopoly by restricting output regardless of the adverse effects. Alternatively, the seller can seek to forestall competitor entry by pricing above its own costs but just below the estimated costs of its next most efficient rivals. The law does not mandate "competition." The monopolist only courts antitrust liability if it forestalls competition by actions that are deemed predatory under currently prevailing standards. These can change dramatically over time, and are controversial at any given time. Compare the economics of Alcoa, which even condemned a monopolist's expansion of capacity, with the broadly permissive standard in the D.C. Circuit's recent Microsoft opinion,(6) which in turn has been criticized by a prominent economist on this panel.(7)

It is now regarded as axiomatic that the law protects "competition," not a particular "competitor," because it is injury to the competitive process that implicates consumer welfare. But, this is not the full story. If the necessary injury to the competitive process is established, targeted competitors have an antitrust cause of action for lost profits, in addition to consumers who may be able to prove monopoly overcharges.(8) It can be argued, of course, that a competitor's action really is ultimately in aid of consumer welfare because it may serve as a more likely and efficient deterrent. It might be more accurate, however, to justify the action as appropriate redress for a kind of tortious interference with a potential competitor's freedom to compete, in circumstances where recognition of this freedom is more important than other offsetting considerations.

The superiority of this rationale becomes even more apparent when the "predatory" conduct involves sales below cost or product bundling that does not involve any present consumer harm at all. It may be necessary to undertake a very complex economic analysis to establish that the potential for future consumer harm is sufficiently serious to invoke an antitrust remedy. But, this potential future harm will not support a consumer suit for damages; as a practical matter, the injured competitor is the only private party with a present cause of action. Again, this state of affairs is difficult to square with a pure consumer welfare standard.

In addition, courts are likely to engage in economic analysis that is cursory or strained, to say the least, in order to condemn exclusionary conduct that appears to be particularly arbitrary or vindictive.(9) This can be squared with traditional analysis by arguing that exclusionary conduct with no efficiency justifications confers zero consumer benefits, and any potential consumer harm, however speculative, will always outweigh a zero benefit. This is one way to look at it. But, again, it is the wronged competitor who will recover, and it is a lot simpler to acknowledge that it has suffered direct and immediate interference with its freedom to compete. Purists among us may object to this conflation of antitrust and other business torts, but realists are likely to recognize that courts will continue to do it.

Put another way, recognition of seller freedom may shortcut the analysis in monopolization cases. This works both ways. The challenged actor (another seller) has freedom rights, too, including normally the right to select its own customers, price aggressively, and define the contours of its own products. And if the exclusionary conduct is efficient from the standpoint of this actor, the efficiencies are properly weighed in the balance without a further demonstration that they will be passed through to ultimate consumers. A fundamental issue is whether the defendant has erected barriers, not to improve its own efficiency but to undercut the efficiency of a competitor. (When counseling clients that arguably had, or were perceived to have some market power, I often found it useful to inquire whether a business proposal was primarily designed to "do something for customers" or to "do something to competitors." This obviously does not address the whole story, but it is a useful beginning.)

Resolution of monopolization issues of course requires economic analysis. But I submit that antitrust law is better understood if this analysis is viewed as an ever evolving process for choosing between conflicting freedom interests rather than as an ultimate value.

B. Mergers

Freedom interests also have an impact on merger policy. Antitrust law clearly distinguishes growth by merger from growth by internal expansion. It is hard to identify a pure economic rationale for this different treatment. It is true that a horizontal merger, for example, directly eliminates a competitor, but the exit (or entry) of a single competitor is normally not regarded as a particularly significant event. Most mergers are driven by efficiency, just like internal investments in capacity, and the marketplace will normally discipline inefficient mergers as well as inefficient internal expansions. Yet, statutory law mandates that all mergers above certain size thresholds must be reviewed by the antitrust agencies.

Moreover, the substantive standards applied in merger enforcement have a strong incipiency component. The threat of market power, exercised either unilaterally or in combination, does not have to be imminent; merger law operates as an outer wall of defense. The levels of post-merger concentration that give rise to agency concerns are well below those accepted as presumptive evidence of market power in other contexts.

Antitrust law thus sanctions purely pre-emptive action in the case of mergers, but not in the case of internal growth. The difference may best be explained by the strong deference given to a seller's freedom when its decisions appear to involve only the parameters of its own business. The word "appear" is appropriate here because a variety of joint ventures, alliances and long-term contracts can blur the boundaries. The economic effects of these various forms of collaboration can also differ widely, and are likely to be evaluated by increasingly sophisticated substantive rules,(10) but the basic preference for internal expansion will persist. As further discussed below, the most interesting future development in merger law may result from a heightened appreciation of another freedom, that of buyers.

C. Vertical Restraints

People with long memories may view an emphasis on the core value of freedom as a retrograde step, which threatens a return to the discredited populist antitrust of the 1960s and earlier. The concept of "trader freedom," under one name or another, has been frequently invoked to strike down various vertical arrangements between manufacturers and their dealers.(11) This line of authority was substantially overruled in 1977 by the Sylvania case,(12) when the Supreme Court recognized that vertical restrictions can facilitate more efficient distribution of products, with positive consumer welfare effects. One view of Sylvania and its progeny is that consumer welfare rather than dealer freedom is now recognized as the fundamental antitrust value.

There is, however, another way to look at the matter. It could be argued that the trouble with pre-Sylvania authorities is that they took too limited a view of freedom. They focused only on a dealer's freedom to select the most effective means for distributing its products and failed to place any value on a manufacturer's freedom to do the same thing.(13) It was wrong to assume that a manufacturer has no legitimate interest in what happens once it has parted with formal title; it may, for example, have ongoing service responsibilities, concerns about the amenities available at the points of sale to ultimate consumers, and an interest in preserving the goodwill associated with products that bear its name.(14)

In other words, once again there are competing seller freedoms to be accommodated. Consumer welfare economics may be a useful tool for weighing the significance of these competing freedoms, but this most useful calibrating function can be performed without the further claim that consumer welfare is the sole concern.

A recognition that competing freedoms are involved may also make it easier to understand the difference between manufacturer instigated vertical restraints and dealer instigated vertical restraints. The economics are not immediately obvious (and, of course, Dr. Miles got it wrong), but it is relatively easy to contrast a manufacturer's freedom with respect to the distribution of its own products and an attempt by a group of dealers to restrict the freedom of other dealers.

Recognition of seller freedom may also be the best way to explain the Colgate(15) limitation of Dr. Miles. It is a useful fiction to assert that an announced resale price program followed by silent acquiescence constitutes unilateral conduct. Hornbook contract law, however, declares that an offer can be accepted by conduct, and this notion is routinely applied in the horizontal context.(16) The fiction that Colgate programs are unilateral may be justified in conventional consumer welfare terms as an expedient to mitigate the harmful effects of an overreaching decision that has nevertheless acquired sacred status. But it does less violence to contract law simply to recognize that seller freedom was a value recognized by the Colgate Court(17) before the analytical tools were available to explain the reasons why.

Other vertical restraint cases, dominated by consumer welfare rhetoric, implicitly recognize the value of freedom. Vertical cases continue to be brought and won, albeit in greatly reduced number. As in the attempted monopolization cases, the successful plaintiffs typically are dealers, not consumers. This may be best explained by a candid recognition that dealer freedom is a protected value, but only along with the freedom of other actors. An interesting question is whether consumer suits would be stimulated if courts started talking about buyer freedom instead of consumer welfare. This possibility will be addressed below.

D. Horizontal Combinations

Competing seller freedoms are not likely to be the decisive issue in a horizontal case. Unlike the monopolization cases, which require no agreements at all, or the vertical cases, which may involve "agreements" imposed on unwilling parties, the typical horizontal cases involve parties that have voluntarily surrendered some measure of freedom. (People are rarely dragooned into a cartel or joint venture.) You could say that they have exercised their freedom to contract in a way that restricts some of their other freedoms, and many of the agreements are legal. Conspiracy law only makes sense when the conflicting interests of third parties, customers or consumers, are given primary emphasis. This is the place to address what the Introduction proposed as a second great idea that emerged in the last millennium: the concept of consumer sovereignty as a protected freedom.

Consumer sovereignty or "buyer freedom" means that consumers are generally free to buy whatever they want and can afford, whether other people think it is good for them or not. Like seller freedom, buyer freedom does not flourish in the abstract. As we have seen, seller freedom implies the ability to have access to needed inputs or channels of distribution, and recognizes that sellers must be free to make efficient choices. Similarly, consumer freedom implies the right to buy in open markets from sellers who can be trusted. These ancillary rights become increasingly important as trade expands and transactions become more anonymous. Personal trust and confidence in fair dealing have been supplemented by competition and consumer protection law as guarantors of key elements of buyer freedom.

An immediate question is whether reference to "buyer freedom" rather than the more familiar "consumer welfare" adds anything to our understanding. Again, semantics are important. "Freedom" is a word that suggests active participation by individuals in shaping the marketplace; "welfare" suggests benefits enjoyed by a collective group who are passive beneficiaries of decisions made by others.(18)This distinction may not make a difference in most cases, but some apparent anomalies in present law may seem more logical if buyer freedom is perceived as an independent value.

For example, lay people are frequently puzzled by the fact that two competitors with, say, a 10% share of an unconcentrated market cannot legally agree on even a small element of price, while they may be permitted to undertake a far more competitively significant step of outright merger. The standard response is that, unlike the "naked" price agreement, the merger may promise efficiencies that contribute to consumer welfare. A similar economic rationale would explain why it is not illegal for two otherwise independent competitors to submit a joint bid if that is what the customer wants. The explanation would be that the customer must perceive some offsetting efficiencies if it agrees to the procedure (perhaps assurance of supply). But surely there is another factor involved in these precedents, namely, recognition that buyers' freedom includes the ability to get or not get competitive bids, as they see fit.

As an aside, it is worth noting that an overt recognition of buyer freedom as an antitrust value would also more clearly illuminate the close link between competition law and consumer protection law. In the hypotheticals just discussed, you could argue that undisclosed price fixing "deceives" consumers in the same way as undisclosed defects or performance deficiencies - - deceptions that are normally addressed by consumer protection laws. The interface between competition and consumer protection law has been noted by others,(19) and is worth a paper on its own, but I predict that the interface will become increasingly significant as the world shrinks, anonymous transactions proliferate and products become more complex. Both competition and consumer protection laws require a balance between seller and buyer freedom and both also embody concern about escalating information costs in the modern world.

The more active connotations of the term "buyer freedom" may have even greater significance in the future. As we have seen in the discussion of unilateral conduct and vertical restraints, representatives of consumers typically do not sue, even though consumer interests are ostensibly involved. There are a lot of reasons for this, including the fact that the consumer "injury" may be inchoate or otherwise difficult to prove. The effects may not be obvious enough for consumers to get indignant about them.

But, the situation may be different in a world of global commerce and virtually costless communications across national boundaries. Vertical restrictions, which require consumers to buy only from designated outlets, may in the future arouse far more consumer resentment than they have historically. These resentments may stimulate litigation in which consumer sovereignty or buyer freedom, as an active value, is overtly addressed.

Moreover, traditional consumer welfare economics, with its emphasis on producers' price and output decisions, things that can be quantified and manipulated in equations, has not had much to say about the infinite varieties of consumer taste. Not everyone patronizes the movie theater with the cheapest tickets or the restaurant that advertises "all you can eat." Attention to individual tastes will become more and more important as exploding technology provides the means to satisfy them in ways heretofore unknown. Recognition of a "buyer freedom" as an active value may therefore stimulate more attention to qualitative concerns. Impacts on product variety, for example, may be viewed as analogous to impacts on product quality. Product quality is currently recognized as a positive consequence of competition, but it is not measured by most economic models that rely on the simplifying assumption of product homogeneity.

The effects on merger analysis are likely to be profound. Market definition, concentration ratios and the like are most important in cases involving commodity products and become progressively less helpful as products become more differentiated. It is notable that merger analysis already focuses more on "unilateral effects,"(20) which depend on product differences, than on "coordinated effects," which depend on product similarities. The exercise of "buyer freedom" with the personalized technology available in the new millennium may mean that, in a very real sense, individuals can be markets in themselves. Economists will have to learn some new moves.

III. The Role of Economic Analysis

At no point have I suggested that economic analysis of consumer welfare effects is irrelevant now or should be irrelevant in the future. Quite the contrary, antitrust law has been fact-bound since the Supreme Court articulated the "Rule of Reason" some 90 years ago, and becomes increasingly so as the reach of the doctrine expands and economic learning becomes ever more sophisticated and complex. This emphasis on facts - - especially economic facts - - is entirely consistent with the Anglo-American common law tradition.

As stated, the emphasis on factual analysis is directly related to another great development in the millennium just past - - a development comparable in importance to the gradual recognition of buyer and seller freedom - - namely, the growth of the spirit of scientific inquiry (which includes inquiry into economic phenomena). Inductive reasoning based on empirical facts rather than deductive reasoning from first principles has also led to immense changes in human society. But, as a society, we have outgrown the utopian notion that ultimate questions can be decided by technocrats in long white coats. For one thing, scientific answers are often indeterminate, and they change as new facts become known. Microeconomics is better viewed as a tool that is continually sharpened and improved, not as an ultimate value.

For another thing, as we have seen, facts cannot be ignored simply because present methods do not permit them to be described and measured with full scientific rigor. Qualitative factors become progressively more important as people move further away from a subsistence standard of living. Measures of output and price do not capture the total economics of consumer welfare - - much less the economic welfare of the other actors in the system, which can have an ultimate effect on consumer welfare. There really is no such thing as an objectively determined consumer welfare; we can assess the directional effects of various business strategies but, in the close cases, we cannot balance them in a rigorous way.(21) There will be a much expanded role for economic analysis if freedom is recognized as a core value, and a lot more research to be done. However, I doubt that an expansion of economic understanding will drive the competition law of the new millennium. Competition law will be driven by different values and economic understanding will necessarily grow to aid in balancing the conflicts between these values.(22) The concepts discussed in this paper do not represent a repudiation of economic analysis, but rather a challenge.

Another advantage flows from recognition of welfare economics as a means, not the end: economists will have to search for principles that can be applied in a practical way. One of the most cogent criticisms of so-called "post-Chicago" economics is that its practitioners offer a lot of interesting speculation about possible anticompetitive outcomes but little in the way of practical guidance to distinguish between harmful and benign behavior.(23) Economic models with indeterminate outcomes necessarily have a limited impact on courts when deciding cases, on prosecutors when selecting cases and, perhaps most important, on counselors when advising on proposed conduct. If economic speculation is not a useful tool, it simply becomes "recreational theology"(24) for the small circle that can understand it.

IV. Conclusion

An emphasis on freedom would not portend a warm and fuzzy antitrust policy, which just feels good; it would demand an antitrust policy that recognizes economic behavior is complex and that freedom of choice is a value that sellers and buyers are willing to "pay" for in economic terms. I would like here to record the prediction - - or, perhaps, just the fond hope - - that individual freedom, which has influenced antitrust law in more ways than we may now realize, will continue as a core value in the millennium to come.


1. The "generally" qualifier has been added here and in the preceding paragraph on seller freedom because there continue to be some occupations that are licensed by the state or prohibited altogether, and some goods and services are similarly restricted or banned.

2. See, e.g., Jacobs, An Essay on the Normative Foundations of Antitrust Economics, 74 N.C. L. Rev. 219 (1995). Bork's book suggests allocative efficiency (R. Bork, The Antitrust Paradox, note 3, at 81-89 (1978)); Fox, Sullivan and Pitofsky have supported political values in the past (E. Fox, The Modernization of Antitrust: A New Equilibrium, 66 Cornell L. Rev. 1140 (1981); L. A. Sullivan, Economics and More Humanistic Disciplines: What are the Sources of Wisdom for Antitrust?, 125 U. Pa. L. Rev. 1214 (1977); R. Pitofsky, The Political Content of Antitrust, 127 U. Pa. L. Rev. 1051 (1979)); Lande has supported wealth redistribution (R. H. Lande, Challenges to the Chicago School Approach: Chicago's False Foundation: Wealth Transfers (Not Just Efficiency) Should Guide Antitrust, 58 Antitrust L. J. 631 (1989)), and a lot of antitrust warhorses have touted competition for its own sake.

3. This point is made effectively in Peritz, A Counter-History of Antitrust Law, 1990 Duke L.J. 263, an article written from an overall perspective that is radically different from my own.

4. Those who are tempted to forget the immense contributions of consumer welfare economics may reflect on what our economy would look like if we had had 25 more years of populist hostility to efficiency, with associated follies like Senator Hart's Industrial Reorganization Act and proposals to prosecute so-called "no-fault monopolies." See Report, National Commission for the Review of Antitrust Laws and Procedures, 141-63 (1979) (discussion of "no-fault" monopolization); Columbia Univ., Industrial Concentration: The New Learning, 444-48 (1974) (text of S. 1167, Industrial Reorganization Act).

5. Even people who agree on the primacy of microeconomic analysis differ on the relative frequency of occasions when it is more efficient to intervene or, alternatively, to wait for free market correctives. In any event, these arguments aren't very helpful in determining liability for past conduct and are unlikely to impress private litigants.

6. These two cases represent polar extremes. Compare United States v. Aluminum Co. of America, 148 F. 2d 416, 431 (2d Cir. 1945) ("we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization . . ."); with United States v. Microsoft Corp., 147 F.3rd 935,949-50 (D.C. Cir. 1998) ("A court's evaluation of a claim of integration must be narrow and deferential. . . . [A finding that particular computer products are illegally tied] must be limited to those instances where the technological factor tying the hardware to the software has been designed for the purpose of tying the products, rather than to achieve some technologically beneficial result. Any other conclusion would enmesh the courts in a technical inquiry into the justifiability of product innovations.")

7. Franklin Fisher, Antitrust and Innovative Industries (unpublished comments prepared for "Antitrust at the Millenium" panel).

8. See generally Herbert Hovenkamp, Federal Antitrust Policy 557-59 (1994).

9. See, e.g., Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985); Eastman Kodak Co. v. Image Technical Servs., 504 U.S. 451 (1992).

10. See, e.g., Antitrust Guidelines for Collaborations Among Competitors, Issued in Draft by the Federal Trade Commission and the U.S. Department of Justice, Oct. 1, 1999.

11. See, e.g., Albrecht v. Herald Co., 390 U.S. 145 (1968); see also A. Meese, Economic Theory, Trader Freedom, and Consumer Welfare: State Oil v. Khan and the Continuing Incoherence of Antitrust Doctrine, 84 Cornell L. Rev. 763, 765 (1999).

12. Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977).

13. Justice Holmes actually grasped the point intuitively in his Dr. Miles dissent: "I think that, at least, it is safe to say that the most enlightened judicial policy is to let people manage their own business in their own way, unless the ground for interference is very clear. . . The Dr. Miles Medical Company knows better than we do what will enable it to do the best business." Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 411-12 (1911).

14. As an illustration of the difference that semantics can make, consider whether the law of vertical restraints would have evolved differently if, instead of viewing manufacturers as sellers of products to dealers, courts had earlier recognized that manufacturers are also purchasers of services from dealers. It might have been more obvious that the manufacturers have a legitimate interest in specifying the services that they want to buy and, in effect, establishing at least the maximum price that they are willing to pay. See State Oil Co. v. Khan, 118 S.Ct. 275 (1997). In addition, there probably would be less concern about possible facilitation of dealer cartels by manufacturers, because customers very rarely encourage collusion among their suppliers.

15. United States v. Colgate & Co., 250 U.S. 300 (1919).

16. See, e.g., Interstate Circuit, Inc. v. United States, 306 U.S. 208, 222-23 (1939). See generally, John D. Calimari and Joseph M. Perillo, Contracts § 2-19 (3d ed. 1987) ("It is . . . possible for acceptance [of a contract] to arise by affirmative conduct"). Similarly, UCC § 2-204(1) states, "a contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract."

17. Note that a Colgate program is highly unlikely to be challenged if all parties adhere to it willingly, i.e., when there is perfectagreement. It is only when a dealer or dealers strongly disagree with the program that courts are likely to find an illegal combination! This bizarre outcome may be explained by the fact that only then are inconsistent freedom interests being asserted.

18. For a comparable example outside antitrust, consider what the impact would be on the health care system if "patients" were instead called "clients" or "customers."

19. See N. Averitt and R. H. Lande, Consumer Sovereignty: A Unified Theory of Antitrust and Consumer Protection Law, 65 Antitrust Law Journal 713 (1997).

20. U.S. Department of Justice and Federal Trade Commission, Horizontal Merger Guidelines, 4 Trade Reg. Rep. (CCH) ¶ 13,104 (1992), § 2.2.

21. See H. Demsetz, 100 Years of Antitrust: Should We Celebrate?, at the Brent T. Upson Memorial Lecture, George Mason University School of Law, Law and Economics Center (September 21, 1989) (on file with the Columbia Law Review).

22. It is possible that a better understanding of the economics of seller freedom and buyer freedom will have a salutary spillover effect in other areas of government regulation. Up to now, policy makers have maintained an artificial distinction between "economic" regulation that relates to things like entry and prices and "non-economic" regulation that relates to things like health, safety and the environment - - as if limitations on buyers' and sellers' freedom to make economic choices were matters of no economic consequence.

23. See, e.g., Jacobs, supra n.2 at 240-54.

24. This wonderful phrase was, to my knowledge, first applied to speculative theories about the nature of the universe that cannot, by their very nature, ever be tested.