The Antitrust Paradox

Bork, then a Yale law professor and later a federal judge, argued that American antitrust law had become incoherent because courts pursued multiple inconsistent goals, and that it should pursue one: consumer welfare, which he equated with allocative efficiency.

The paradox of his title is that antitrust enforcement as practised was making consumers worse off. Courts blocked mergers that would have produced efficiencies, condemned vertical arrangements that improved distribution, protected small competitors from more efficient rivals, and treated low prices as evidence of predation. Bork argued each of these harmed the consumers the law existed to protect.

His specific positions follow. Vertical restraints including resale price maintenance, exclusive dealing and territorial restrictions should be presumptively lawful, because a manufacturer has no incentive to reduce output at the retail level and such arrangements usually solve free-rider problems in distribution. Vertical integration rarely harms competition because a monopolist can extract its monopoly profit at one level and gains nothing from extending to another. Predatory pricing is almost never rational, because the predator loses more during the campaign than it can recover afterward, and so allegations of it should be viewed sceptically. Horizontal mergers should be permitted unless they create very high concentration, since efficiencies are common and entry disciplines pricing. Conglomerate mergers raise no competitive issue at all.

He supported this with an interpretation of the Sherman Act's legislative history as having been concerned with consumer welfare, which historians have disputed extensively.

The book's influence was enormous: the consumer welfare standard became the operative test in American antitrust for four decades. It is now under sustained attack from scholars arguing that price-focused analysis cannot address platform markets where the product is free, that concentration has risen across the economy with measurable harms to workers and suppliers, and that Bork's reading of the statute's history was wrong. Readers should treat it as a powerful statement of a position whose dominance is ending rather than as settled law.