This article argues that antitrust doctrine concerning intrabrand restrictions is unsatisfactory because the economic theory of intrabrand restrictions has been only partially developed and articulated. An unfilled and largely unacknowledged analytical gap exists between the view that intrabrand restraints are generally anticompetitive and the view that intrabrand restraints are generally efficiency-producing. That gap is the failure to explore how a manufacturer benefits from intrabrand restraints other than by increasing the profitability of his dealers. This article attempts to fill that gap by drawing on the theory of imperfect competition to explain why manufacturers find it profitable to restrict intrabrand competition in an anticompetitive way. Using this analysis, the article explains why price restraints should indeed be treated differently from nonprice restraints2s and formulates an analytial approach under the rule of reason for addressing nonprice vertical restraints. Non-economic analyses are possible, but are not treated here. The approach of this article rests on economic theory.
Place of Original Publication
Duke Law Journal
Gerhart, Peter M., "The Competitive Advantages Explanation for Interbrand Restraints: An Antitrust Analysis" (1981). Faculty Publications. 601.