STAFF DISCUSSION DRAFT:
FOR PURPOSES OF DEBATE AND DISCUSSION ONLY

This discussion draft, prepared by a member of FTC staff, does not necessarily reflect the views of the Commission, any Commissioner, or any other FTC staff. Responses to this draft may be submitted either by electronic mail to "jventures@ftc.gov" or, captioned "Comment on Issues Relating to Joint Venture Project -- Per Se Illegality/Truncated Rule of Reason," addressed to Donald S. Clark, Office of the Secretary, Federal Trade Commission, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580

PER SE ILLEGALITY AND TRUNCATED RULE OF REASON: THE SEARCH FOR A
FORESHORTENED ANTITRUST ANALYSIS

William E. Cohen
Deputy Director, Policy Planning
Federal Trade Commission
November 1997

TABLE OF CONTENTS

I. THE PER SE CATEGORY: BACKGROUND

A. Historical Evolution
B. Meaning and Consequences of Per Se Status
C. The Rationale for Per Se Analysis -- Its Costs and Benefits

II. DETERMINING WHAT IS PER SE UNLAWFUL

A. Identifying Strong Likelihood of Anticompetitive Effects

1. Judicial Articulations
2. When Effects Cannot Be Predicted
3. Fact Patterns

a. Horizontal Price Fixing
b. Market Division
c. Group Boycotts
d. Summary

B. Identifying Absence of Competitive Benefit

1. General Articulations

a. "Effects-Based" Analysis
b. Ancillary Restraints Analysis
c. General Principles: Quickly Eliminating Plainly
Inadequate Justifications

2. Application of "Effects-Based" Analysis

3. Application of Ancillary Restraints Analysis: To What Must
the Conduct Be Ancillary?

4. Closeness of the Restraint to the Competitive Benefits

5. Connection of the Restraint to the Joint Venture or to the
Competitive Benefits

III. THE TRUNCATED OR "QUICK LOOK" RULE OF REASON

A. Truncation Presuming Competitive Harm from the Nature of the Restraint
and Requiring Demonstration of Procompetitive Justifications

1. Judicial Sources
2. Determining When Truncation Applies
3. A Possible Synthesis
4. The Mass. Board and Stepwise Analyses

B. CDA and Flexible Truncation Analyses

IV. SURVEYING ALTERNATIVE PER SE METHODOLOGIES

A. Self-Standing Analyses: Full Articulation of the Dividing Line

1. Functional Conduct Categories
2. Standards Based on Economic Content

B. Dependent Analyses: Building or Cutting Back on What Has
Been Found Before

1. Formulations that Permit Extension of Traditional Per Se Treatment
2. Formulations that Permit Contraction of Traditional Per Se
Treatment

V. CONCLUSION