abstract. Antitrust leans heavily on the assumption that businesses aim to maximize their profits. But across the economy, the antitrust system is grappling with behavior that defies that assumption. Much of this behavior involves the same conduct, and causes the same harm, as traditional antitrust wrongdoing. From sustainability-driven coordination to online-safety boycotts, and from scale-chasing tech startups to nonprofit-hospital mergers, antitrust can no longer neglect behavior outside the profit paradigm.

This Feature introduces “post-profit antitrust”: a comprehensive theoretical and doctrinal framework that allows plaintiffs to allege and prove, and courts to analyze, non-profit-maximizing behavior in antitrust cases. While broadening antitrust’s imagination along lines suggested by scholarship in behavioral economics, corporate governance, and psychology, it also imposes two key limitations: a mechanism of harm, grounded in antitrust theory; and some asymmetry of treatment between plaintiffs and defendants, grounded in the institutional realities of litigation.

The Feature sketches two alternative ways to operationalize post-profit antitrust: a plaintiff-choice principle for inferences and predictions across the antitrust enterprise, and a new use case for the FTC Act’s elusive prohibition on unfair methods of competition. The Feature thus charts two pathways to reform—one broad, one narrow—to ensure that the antitrust system can reach harmful conduct, whatever its motivation.

author. Associate Professor of Law, NYU School of Law. For helpful conversations and comments, I am indebted to Antonio Aloisi, Jennifer Arlen, Jon Baker, Oren Bar-Gill, Barton Beebe, Dan Crane, Gianmarco Cristofari, Danny Cuatrecasas, Marco Dell’Erba, Omar Vasquez Duque, Einer Elhauge, Sam Estreicher, Brittany Farr, Harry First, Ed Fox, Eleanor Fox, Ed Hartnett, Scott Hemphill, Alison Hole, Herbert Hovenkamp, Marcel Kahan, Louis Kaplow, Emma Kaufman, Aditi Khemani, Lewis Kornhauser, Mark Lemley, Christopher Leslie, Daryl Levinson, Taylor Owings, Rick Pildes, Hannah Pittock, Mark Ramseyer, Bill Rinner, Jon Sallet, Steve Salop, Bailey Sanders, Sarah Seo, Carl Shapiro, Danny Sokol, Chris Sprigman, Avishalom Tor, Masako Wakui, Eva Yguico, and the fabulous editors at the Yale Law Journal. Many thanks to participants at workshops at NYU, Kyoto University, and Harvard University. My research is funded only by NYU School of Law; my spouse is an antitrust attorney in private practice.

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Introduction

Antitrust leans heavily on the assumption that businesses aim to maximize their profits. Courts, enforcers, and economic experts use this assumption every day to predict the effects of practices and transactions, to construct “counterfactual” alternatives, and to infer hidden facts. When two businesses plan to merge, for example, courts and agencies assume the merged firm will aim to maximize its profits, and then ask whether the resulting behavior would harm consumers.1 Likewise, when a plaintiff alleges an anticompetitive conspiracy or a scheme of monopolization, courts often resist—or reject out of hand—arguments, evidence, inferences, or predictions that defendants might try to do anything but maximize profits.2

The assumption is often expressed in strong, even categorical, terms. In recent years, the Department of Justice (DOJ) has argued, and the D.C. Circuit has held, that business profit maximization is a principle of antitrust law, not a question of fact.3 The leading treatise states that “[a]s a general proposition business firms are (or must be assumed to be) profit maximizers.”4 In 2005, a Federal Trade Commission (FTC) Commissioner declared that “[t]*he *fundamental assumption of current antitrust analysis is that a business enterprise is a unitary entity dedicated to the maximization of profit.”5 And so on.

But the principle is elusive. On some occasions, it takes the form of a mere presumption, and at other times it seems to disappear entirely.6 And in a handful of cases, nonprofit hospitals and schools have succeeded in using a kind of inverted profit presumption: persuading a court that they should enjoy special antitrust license because, as they are not for-profit enterprises, they will not exploit market power harmfully.7 But such departures are sporadic, generally untheorized, and often highly controversial.

In reality, the proposition that businesses aim to maximize profits is a rough simplification at best, and in some cases it is obviously wrong. For decades, scholars of economics, psychology, and management have studied the many ways in which real businesses, led by real managers, deviate from strict profit maximization. But efforts to integrate those teachings into antitrust doctrine—to create a “behavioral antitrust”8 or a more expansive account of antitrust rationality9—have been resisted, lest antitrust analysis become an unstructured free-for-all. Traditionalists have argued that profit maximization is a good enough guide to serve antitrust’s needs—and that the profit presumption is vastly better than rudderless speculation.10 The result has been deadlock in the academy, while courts have doubled down on profit maximization.

But today antitrust’s profit paradigm is under pressure. The policy agenda is jammed with allegations and evidence that, at least sometimes, something other than tractable profit maximization is going on. Competitors cooperate to pursue environmental, social, and governance (ESG) goals; market participants engage in social-media boycotts to express their values; digital startups aim to make a splash, go viral, and be acquired rather than turn a steady profit; religious hospitals acquire rivals and terminate reproductive services, sacrificing profits for reasons of faith; and so on.11 And economic theory teaches that, whatever their motivation, such practices can lead to all the harms with which antitrust is traditionally concerned, including higher prices and the loss of output and innovation.

Sometimes, to be sure, such practices may “really” be provably profit maximizing: for example, a play for value-driven customers.12 But what about the other cases? The ones driven, in whole or part, by values like environmentalism; by metrics like firm scale or managerial compensation; by mistakes; or by the special nature of entities like nonprofits and emanations of government. What should litigants, agencies, and courts do when the link between conduct and profit is uncertain, implausible, or unknowable?

These cases are a puzzle. A mountain of theoretical and empirical scholarship shows that they exist. And they often implicate deeply difficult questions of policy and politics. Can businesses pursue ESG goals, or content-moderation objectives, jointly? How should antitrust courts approach Big Tech acquisitions of startups that show little or no interest in building a sustainable profit stream? Should antitrust enforcers distinguish between faith-based and secular healthcare providers in merger reviews—for example, by considering religious doctrine when predicting what a merged firm will do?

Whatever one thinks about the answers, these questions cannot easily be framed within the bounds of a profit-maximizing imagination. And it is far from obvious that antitrust’s best response to non-profit-maximizing behavior is simply to deny that it can happen in the first place. As value-driven conduct becomes more salient and controversial, the time is ripe for an explicit and principled account of antitrust’s role outside the profit paradigm.

This Feature proposes a comprehensive framework for relating antitrust to profit maximization, and charts a way forward past the deadlocked debate between behavioralists and traditionalists. Its core claim is that—within some important bounds—antitrust can and should entertain allegations, evidence, inferences, and predictions that businesses will engage, or have engaged, in non-profit-maximizing behavior.

It builds on a formidable literature. Scholars of economics, psychology, and organizations have advanced our understanding of business behavior. Many legal scholars have written about the power, limits, and deficiencies of a rational-actor model. And, within antitrust, scholars like Christopher R. Leslie, Avishalom Tor, Maurice E. Stucke, and others have urged reform of antitrust’s relationship with rationality in general and profit maximization in particular.13 This Feature attempts to take the next step: showing that antitrust’s imagination can be expanded without disturbing its conceptual foundations, without requiring courts to accept affirmative and controversial behavioral theories, and without inviting a free-for-all.

To that end, this Feature makes three main claims.

The first claim is that, despite the views of many courts and scholars, antitrust is not, as a matter of law, committed to a specific behavioral paradigm, including the presumption that businesses maximize profits. Nor, as a matter of principle, does it need one. Antitrust violations are creatures of the short run and the individual case, and they need not live within any particular grand theory of behavior. And, as other areas of law demonstrate, prediction and inference can be undertaken just fine in individual cases without a strict behavioral model in hand.

The second claim is that there is a strong, but bounded, case for “post-profit antitrust”—that is, an antitrust system that takes the profit motive seriously but accepts allegations, evidence, inferences, and predictions of non-profit-maximizing behavior. The core of that case is identical to the traditional case for antitrust itself. Non-profit-maximizing behavior may involve the very same conduct, and inflict the very same harms, as traditional antitrust wrongdoing. Cartels, monopolization, and mergers may all harm consumers without maximizing their participants’ profits, whether motivated by ethical values, vindictive animus, religious faith, or some other goal. Moreover, courts have often emphasized that the presence of a profit motive does not strengthen the case for antitrust liability; it follows that the absence of that motive does not weaken it.

But the bounds of the post-profit paradigm, which help preserve antitrust’s coherence and predictability, are equally important. One such bound arises from antitrust’s characteristic mechanism of ultimate harm. I will suggest, in what I will call the “Spear-Tip Rule,” that any well-framed antitrust theory of harm must culminate in the harmful suppression of rival ability or incentive to contest trading relationships (broadly speaking, collusion or exclusion) that contributes to pricing power. This conception of harm rules out post-profit liability for practices that cause harm in other ways, or not at all. But it allows harmful, non-profit-maximizing conspiracies, exclusion, and mergers to be alleged, inferred, predicted, and remedied.

The other bound on antitrust’s imagination is a prudential and practical one. I will suggest that, despite the appeal of symmetry, there is a better general case for allowing plaintiffs to set aside the profit paradigm than for allowing defendants to do so. As doctrine and practice in other fields demonstrate, fears of a free-for-all are misplaced so long as a plaintiff must prove, according to the regular rules of evidence, that particular non-profit-maximizing behavior has happened or likely will happen. By contrast, allowing defendants to put their own objective functions at issue in a traditional case would turn antitrust litigation into a quagmire, given defendants’ unique ability and incentive—as the authors of their own records and the beneficiaries of their own conduct—to manipulate the process.

The third claim is that there are at least two ways in which we might reconstruct antitrust doctrine to put the profit paradigm in its proper place. I offer a broad proposal and a narrow one. The broad proposal is that a plaintiff in any civil antitrust action should be entitled to offer a “traditional” theory, with predictions and inferences constructed subject to a strict profit-maximization principle, or a post-profit one, to which no such constraint would apply. Or, as always, the plaintiff may plead both in the alternative. Recognizing the asymmetry described above, a defendant would not be entitled to argue that post-profit predictions and inferences should be drawn *except *in response to a post-profit theory offered by a plaintiff. (This exception reflects, among other things, the observation that concerns about gamesmanship are muted when both parties agree that a strong presumption of profit maximization is inappropriate.) This framework would apply to all antitrust suits, whether brought by the government or a private plaintiff, and whether alleging unlawful restraint of trade, monopolization, or merger.

The narrower proposal—for incrementalists, those who fear a free-for-all of meritless claims, or courts constrained by appellate authority—is to treat post-profit antitrust as a use case for the most mysterious of antitrust rules: the prohibition of “unfair methods of competition” in Section 5 of the FTC Act. This approach offers several advantages, including the presence of a government gatekeeper and remedial modesty, but some mild reforms would be necessary to make it genuinely effective.

* * *

To illustrate the value of a post-profit perspective, the Feature offers four hypotheticals and argues that a court should be willing to infer and predict non-profit-maximizing behavior in three of them.

In the Altruistic Boycott case, a plaintiff alleges that competitors have agreed to refrain from a profitable trading relationship for reasons of value, ethics, or mission, under circumstances in which doing so harms consumers and causes a loss of profits to each participant. For example: a group of airlines might agree to switch from a low-cost, high-emission fuel to a higher-cost, lower-emission one, increasing prices and reducing profits but protecting the environment. The Altruistic Boycott recalls cases like Matsushita Electric Industrial Co. v. Zenith Radio Corp.,14in which the alleged conspiracy may have been motivated in whole or part by the objective of growth as such, as well as modern allegations about collusion to pursue goals like sustainability.

In the Vindictive Excluder case, a plaintiff alleges that a monopolist has harmed consumers by engaging in exclusionary practices at the cost of bottom-line profits. For example: the CEO of an automobile-component manufacturer with monopoly power in one kind of component might decide to tie that component to another (that is, sell it only as part of a package), even at the cost of overall profits, in order to punish a rival making the second component. Perhaps the rival hired away a valued employee, or perhaps the rival’s CEO simply made an offensive remark at a drinks party. The Vindictive Excluder recalls malicious business torts, as well as antitrust cases in which scholars and courts have concluded that, if the challenged conduct were harmful to consumers, it would not be profit maximizing (including for single-monopoly-profit reasons15), and that the conduct therefore could not possibly be harmful.

And in the Catholic Hospital Merger case, a plaintiff alleges that a hospital merger will harm consumers because the merged firm will stop providing certain services (for example, terminations and sterilizations) for religious reasons. It recalls the many such acquisitions chronicled by scholars and journalists.

Each of these cases—grounded in real-world examples—involves consumer harm. Each defies the assumption that market participants seek to maximize their profits. And each would meet something between an outright bar and a very stiff headwind from agencies and courts today.

Accepting post-profit antitrust means recognizing that antitrust needs neither the bar nor the stiff headwind. In these and other appropriate cases, a court should be willing to infer or predict that the relevant businesses did or will engage in the relevant harmful conduct despite the resulting loss of profits. Plaintiffs of all kinds should be permitted to allege and prove such theories of harm, and the antitrust-enforcement agencies should be willing to advance such theories in appropriate cases. The Altruistic Boycott, Vindictive Excluder, and Catholic Hospital Merger are all unlawful, absent a special immunity like the First Amendment.

But the asymmetric approach offered here closes the door on a fourth hypothetical. Discount Dave is the CEO of a firm pursuing a merger. He is earnestly and credibly committed to charging low prices and refusing to foreclose his rivals, despite the incentives to cause harm that the merger would create. I will argue that the costs of entertaining such arguments—including the risks that Discount Dave might be lying or mistaken, change his mind, or be replaced—justify declining to spend resources ventilating such claims, even through a post-profit lens. Only if the plaintiff is itself offering a post-profit case should a court try to grapple with Discount Dave’s representations.

* * *

The Feature proceeds in four Parts. Part I describes the problem: antitrust’s profit paradigm and the harmful practices that challenge it. Part II explains how we got here, through a short intellectual history of the profit presumption in antitrust analysis, including scholarly efforts to qualify it. Part III argues that courts can and should be willing, in some cases, to depart from the profit-maximization paradigm. Part IV prescribes two alternative paths to operationalize post-profit antitrust: a plaintiff-choice principle across the antitrust enterprise and a modest expansion of Section 5 of the FTC Act.