finding illegal a rule forbidding competitive bidding within professional organization, apparently made on the good faith belief that competitive bidding would result in deficient engineering work and defective products
How later courts described this case
- finding illegal a rule forbidding competitive bidding within professional organization, apparently made on the good faith belief that competitive bidding would result in deficient engineering work and defective products
- explaining that the “First Amendment does not ‘make it . . . impossible ever to enforce laws against agreements in restraint of trade . . . .’” (quoting Giboney v. Empire Storage & Ice Co., 336 U.S. 490, 502 (1949))
- holding that policy goals such as protecting public safety and promoting ethical behavior do not qualify as legitimate pro-competitive objectives unless they serve to “regulate and promote” competition
- noting that the Sherman Act "reflects a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services.... The assumption that competition is the best method of allocating resources in a free market recognizes that all elements of a bargain — quality, service, safety, and durability. — and not just the immediate cost, are favorably affected by the free opportunity to select among alternative offers.”
Written by the judges who cited it.
The opinion
Mr. Justice Blackmun,
with whom Mr. Justice Rehnquist joins, concurring in part and concurring in the judgment.
I join Parts I and III of the Court’s opinion and concur in the judgment. I do not join Part II because I would not, at least for the moment, reach as far as the Court appears to me to do in intimating, ante, at 696, and n. 22, that any ethical rule with an overall anticompetitive effect promulgated by a professional society is forbidden under the Sherman Act. In my view, the decision in Goldfarb v. Virginia State Bar, 421 U. S. 773, 788-789, n. 17 (1975), properly left to the Court some flexibility in considering how to apply traditional Sherman Act concepts to professions long consigned to self-regulation. Certainly, this case does not require us to decide whether the “Rule of Reason” as applied to the professions ever could take account of benefits other than increased competition. For even accepting petitioner’s assertion that product quality is one such benefit, and that maintenance of the quality of engineering services requires that an engineer not bid before he has made full acquaintance with the scope of a client’s desired project, Brief for Petitioner 49-50, 54, petitioner Society’s rule is still grossly overbroad. As petitioner concedes, Tr. of Oral *700 Arg. 47-48, § 11 (c) forbids any simultaneous consultation between a client and several engineers, even where the client provides complete information to each about the scope and nature of the desired project before requesting price information. To secure a price estimate on a project, the client must purport to engage a single engineer, and so long as that engagement continues no other member of the Society is permitted to discuss the project with the client in order to provide comparative price information. Though § 11 (c) does not fix prices directly, and though the customer retains the option of rejecting a particular engineer’s offer and beginning negotiations all over again with another engineer, the forced process of sequential search inevitably increases the cost of gathering price information, and hence will dampen price competition, without any calibrated role to play in preventing uninformed bids. Then, too, the Society’s rule is overbroad in the aspect noted by Judge Leventhal, when it prevents any dissemination of competitive price information in regard to real property improvements prior to the engagement of a single engineer regardless of “the sophistication of the purchaser, the complexity of the project, or the procedures for evaluating price information.” 181 U. S. App. D. C. 41, 45, 555 F. 2d 978, 982 (1977).
My skepticism about going further in this case by shaping the Rule of Reason to such a narrow last as does the majority, * arises from the fact that there may be ethical rules which have a more than de minimis anticompetitive effect and yet are important in a profession’s proper ordering. A medical association’s prescription of standards of minimum competence for licensing or certification may lessen the number of *701 entrants. A bar association’s regulation of the permissible forms of price advertising for nonroutine legal services or limitation of in-person solicitation, see Bates v. State Bar of Arizona, 433 U. S. 350 (1977), may also have the effect of reducing price competition. In acknowledging that “professional services may differ significantly from other business services” and that the “nature of the competition in such services may vary,” ante, at 696, but then holding that ethical norms can pass muster under the Rule of Reason only if they promote competition, I am not at all certain that the Court leaves enough elbowroom for realistic application of the Sherman Act to professional services.
This Court has not always applied the Rule of Reason with such rigor even to commercial businesses. See Appalachian Coals, Inc. v. United States, 288 U. S. 344 (1933); Chicago Board, of Trade v. United States, 246 U. S. 231 (1918); L. Sullivan, Law of Antitrust 175-182 (1977); R. Bork, The Antitrust Paradox 41-47, 56 (1978). I intimate no view as to the correctness of those decisions.