Spencer Smith (U Michigan Law) has posted “”Combination” and the Future of Antitrust Law” on SSRN. Here is the abstract:
Recent litigation over pricing algorithms has exposed a fault line in United States antitrust law. Section 1 of the Sherman Act prohibits every “contract, combination in the form of trust or otherwise, or conspiracy” in restraint of trade. Yet current doctrine has collapsed these three statutory terms into a single, non-statutory term, “agreement,” and interpreted this requirement primarily by reference to conspiracy concepts. This interpretive collapse poses a fundamental challenge when competitors adopt pricing algorithms that generate cartel-like outcomes without conventional agreements. Courts applying the agreement requirement often dismiss such claims, while economic research demonstrates that algorithmic coordination can harm competition.
This Article argues that antitrust law should revive the Sherman Act’s concept of “combination” as analytically distinct from contract and conspiracy. When Congress outlawed every “combination in the form of trust or otherwise” in restraint of trade, it targeted novel organizational devices that allowed competitors to consolidate market power and suppress rivalry. The statute’s language reaches collective restraints not reducible to contract or conspiracy and anticipates new “forms” by which rivals might “otherwise” be joined. Pricing algorithms today perform a comparable function: they provide shared mechanisms that can effectively combine otherwise separate entities in ways that lessen competition.
Treating algorithm-mediated coordination as “combination” recovers a category Congress deliberately included while preserving the traditional boundary between lawful interdependence and unlawful concerted action. This approach offers a flexible standard and workable remedies for addressing harms emerging from artificial intelligence, without condemning mere oligopolistic interdependence or requiring evidence of a meeting of minds. Whereas the nature of technological change over the past three decades—the Internet era and its network economies—renewed debates over monopolization and Section 2 of the Sherman Act, the emergence of artificial intelligence raises fundamentally different questions for Section 1. The future of antitrust law in the age of AI, the Article concludes, lies in restoring Section 1’s trinitary structure and directing the combination concept to collective restraints accomplished through new technologies.