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Abstract

In Ohio v. American Express, both the majority and dissent introduced into Supreme Court antitrust jurisprudence a new test for evaluating restraints under the rule of reason: a less restrictive alternatives test. Occasionally appearing in circuit court cases, less restrictive alternatives tests have not been part of Supreme Court’s approach to the rule of reason, which generally evaluates restraints of trade by balancing their anticompetitive and procompetitive effects.

American Express was the first Supreme Court case to mention a less restrictive alternatives test, potentially representing a major shift in antitrust law, but it was not the last. In 2021’s Alston v. NCAA, the Supreme Court applied the test to strike several NCAA compensation restrictions, but it did so without explaining how the test might fit into the rule of reason or providing any single statement of the rule of reason. Rather than explicitly adopting the less restrictive alternatives test as a necessary part of the rule of reason, the Court merely noted that it has “sometimes spoken of” a three-step framework that includes the less restrictive alternatives test, suggesting that the test might or might not apply in any particular rule of reason case.

The Supreme Court has discussed alternatives in antitrust cases, though, and many find in those cases a distinct less restrictive alternatives test. Careful analysis of the cases shows that prior to Alston, the Court has not used anything like a less restrictive alternatives test. Nor should it. A less restrictive alternatives test injects tremendous uncertainty into the rule of reason while doing little to reduce the problems inherent in the kind of balancing the rule of reason requires. The Court’s willingness to accept the less restrictive alternatives test in Alston without accounting for the ramifications of the test is likely to increase confusion in antitrust cases as litigants struggle not only with the inherent indeterminacy of the less restrictive alternatives test itself but also with the question of whether the less restrictive alternatives test is even relevant to their particular case.

This Article traces the development of the less restrictive alternatives test in antitrust scholarship and commentary and evaluates how consideration of alternatives actually does, and should, inform antitrust analysis. The scholarly impulse to include a less restrictive alternatives test in the rule of reason actually highlights the need for a reinvigorated approach to another aspect of antitrust law: the ancillary restraints doctrine. Properly applied, the ancillary restraints doctrine responds to the concerns that motivate the less restrictive alternatives test, but less restrictive alternatives are of limited use even in that inquiry.

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