In 1991, the United States Department of Justice brought an antitrust suit against the Massachusetts Institute of Technology (MIT) and several Ivy League schools that challenged the schools' long-standing agreements to award financial assistance exclusively on the basis of need and cooperate in calculating the financial aid requirements of commonly admitted students. All schools except MIT agreed to a pre-trial consent decree with the government. MIT went to trial. Although the United States District Court for the Eastern District of Pennsylvania found that the schools' agreements constituted illegal price fixing, the United States Court of Appeals for the Third Circuit reversed and remanded. The Third Circuit agreed with the lower court that the Sherman Act applied to the defendant's conduct, but held that the district court erred in failing to give appropriate consideration to the defendant's noncommercial, public service justifications. Given the Third Circuit's opinion, congressional pressure on the Justice Department to drop its price fixing case, and the government's subsequent settlement on terms favorable to MIT, commentators have speculated that the government and the courts will be increasingly receptive to a social welfare defense to antitrust challenges.
The Politically Correct Corporation and the Antitrust Laws: The Proper Treatment of Noneconomic or Social Welfare Justifications Under Section 1 of The Sherman A,
Yale L. & Pol'y Rev.
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