By Thomas Nachbar (University of Virginia)
In Ohio v. American Express, both the majority and dissent injected into Supreme Court jurisprudence a new test for evaluating restraints under the rule of reason: a less restrictive alternatives test. Less restrictive alternatives were relied upon by the Ninth Circuit in the NCAA O’Bannon litigation, and are the subject of a current petition for certiorari in a related NCAA student compensation case, Alston v. NCAA. Occasionally appearing in circuit court cases, less restrictive alternatives tests have not been a part of Supreme Court’s approach to the rule of reason. No previous Supreme Court case has offered less restrictive alternatives as part of its formulation of the rule of reason.
The Supreme Court has discussed alternatives in antitrust cases, though, and many find in those cases a less restrictive alternatives test as a distinct step within the rule of reason. Careful analysis of the cases offered shows that the Court does not use a less restrictive alternatives test within the rule of reason. Nor should it. A less restrictive alternatives test carries considerable risk for the rule of reason. The boundaries of the inquiry are not just vague, they are indescribable. Lessons drawn from other areas of law show that the “less” restrictive alternatives inquiry will lead almost inexorably to a “least” restrictive alternatives test. Moreover, rigorous consideration of alternatives is likely to have outsized effects on particular industries and restraints, particularly in two-sided platform markets and more generally in recently highly scrutinized “big tech” industries.
This paper examines the development of the less-restrictive means test in antitrust scholarship and commentary and considers how alternatives actually do, and should, inform antitrust analysis. That examination reveals that less restrictive alternatives are highly problematic as used in the rule of reason but that their popularity instead points to the need for a reinvigorated approach to ancillary restraints. The ancillary restraints doctrine reflects a value judgment in antitrust, and courts should embrace the ancillary restraints doctrine rather than turn to deceptively quantitative comparisons like less restrictive alternatives.