Part III addresses the guidelines and policies of antitrust enforcement agencies regarding barriers to entry. Part II covers the treatment of entry barriers as a factor in Supreme Court antitrust decisions. In Part I, this Article discusses the different approaches to defining barriers to entry based upon the economic literature and various legal authorities. This would yield inefficient results evidenced by underproduction of desirable goods and services and the charging of supracompetitive prices. By relying too much on economic theory and perhaps ignoring real unilateral or collective market power, courts could run the risk of allowing markets to remain less than optimally competitive. However, given the general recognition that antitrust laws should primarily be enforced to enhance consumer welfare, inappropriate or excessive reliance on entry barrier analysis could result in too much judicial restraint with consequent harm to consumers.
Some might argue that this is precisely the result we should encourage in a free market economy and that interference by courts should be reserved for exceptional circumstances where the market cannot correct distortions or dislocations on its own.
In any case in which a plaintiff must prove market power under section 1 or 2 of the Sherman Act or section 7 of the Clayton act, a requirement that the plaintiff demonstrate significant entry barriers in a particular market may make it difficult, if not impossible, to establish the elements of a successful antitrust claim. Usually, a consideration of entry barriers in a contemporary antitrust case will increase a plaintiff's burden and make it more difficult to prevail on a potentially meritorious federal antitrust claim. In other words, barriers to entry are utilized more as a makeweight than as a truly reliable or persuasive element of substantive antitrust analysis. The primary thesis of this piece is that contemporary antitrust cases often gloss over any real analysis of the existence or absence of entry barriers and simply make passing references to this alleged factor to justify a particular result. Entry barriers play an increasingly influential role in modern antitrust cases despite the fact that they are not mentioned in any of the statutes that govern jurisprudence in this important area of federal law.
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