Modern Antitrust Analysis

Professional Associations:

• Professional associations can set requirements for members: it is helpful to certify quality
• This interest in certifying quality can outweigh interest in having a higher supply of professionals
• Distinction from valid professional association and NSPE: the ban in NSPE is too broad, is not the least restrictive means to accomplish a valid, lawful purpose (like certifying professionals)

Caselaw:

National Society of Professional Engineers v. U.S. (1978)

• Holding: a professional association cannot broadly ban competitive pricing
  • CBT: illegality depends on competitive effects
  • Trenton Potteries: do not permit an inquiry into the reasonableness of prices
  • Trans-MO: there are not special characteristics of an industry that suggest monopolistic arrangements will better promote trade than competition
  • Complementary categories of antitrust analysis:
    • Socony: illegal per se, no elaborate study is required to determine illegality - maybe the case here, unclear
    • CBT: under ROR analysis, the fee ban is too broad and serves as a ban on competitive bidding (not the least restrictive approach to promote quality)
      • Arguing that competition is unreasonable is not a valid defense
• Facts:
  • Engineers who want to bid on a job can't talk about fees per NSPE's code of ethics
    • Can only talk about fees after a client has selected an engineer for a project
  • Engineers argue that work will be inferior and endanger public safety without this agreement
• Note: treat this case like it was per se illegal given the competitive pricing ban, but it isn't clear from the opinion that this is the holding
  • That being said, there is reason to think this could be decided under the abbreviated rule of reason even without direct harm: overly broad restrictions suggest high likelihood of anticompetitive effects

Broadcast Music v. CBS (1979)

• Holding: blanket license is not per se illegal
  • Per se rule isn't appropriate here: strongest argument is gains from trade
    • Efficiencies: bundling like this creates efficiencies that wouldn't exist otherwise (independent transactions with each artist are impossible)
    • By enabling a new type of transaction, blanket licenses enhance competition
  • Other (less compelling) arguments that per se rule is inappropriate:
    • History of consent decree: courts haven't foundt his conduct illegal in the past, hesitate to find it per se illegal now
    • Negative effect of a per se finding: would cast industry into disarray
• Dissent: not offering the per-composition and per-use licenses (when they are feasible to offer) is anticompetitive, unlawful under ROR, limits options available to consumers
• Facts:
  • ASCAP and BMI are associations of artists that offer nonexclusive blanket licenses for artists' music for limited periods - licensee can use music they want during period
  • CBS wants compositions available on a per-use rate
• Notes:
  • If BMI and ASCAP agreed on a price of a blanket license, then there would be a CCC (the agreement) and ROT (price-fixing), so likely per se illegal (would be an easy case)
  • If BMI and ASCAP agreed on type of license, there would be a CCC (the agreement) and ROT (sufficient market power that agreement is anticompetitive), per se illegal
  • If individual composers agree to adopt uniform licensing fee schedule for compositions, whether it is per se illegal likely depends on whether artists have market power (if they do, then the case is analogous to SCTLA)
  • Case is an example of how the ROR requires the court to supervise contracts and prices (as they feared)