Dilution law, vertical agreements, and the construction of consumption

Abstract

Recent reorientations of the paradigms of 20th-century antitrust law have underscored today's post-scarcity regime, with its focus on uncovering and stamping out behaviour that weakens product manufacturers' incentives to invest in the scarcity, uniqueness and authenticity values that everyday goods and services conjure in consumers' minds. Alongside the general intellectual property law developments that support dilution-avoiding business practices, this article identifies recent case law that underlines the ways in which dilution thinking is surfacing in antitrust law. It evaluates the legal implications of such thinking based on a substantial social science literature that reveals the mechanisms by which marketing strategies that focus on a high price, uniqueness and authenticity do their work. As businesses increasingly employ strategies that seek to condense product information into simple decision-making heuristics that deliberately invoke subconscious appeal to persuade, the normative force of consumer choice is called into question. In order to preserve the ability of consumers to effectively choose between alternatives, an increased promotion of intratype competition presents the greatest likelihood of arresting the sea change initiated by antitrust law's dilution revolution. The reason for this finding, as this article demonstrates, resides in the fact that the economic background-the purchasing context-often determines to a significant extent the manner in which consumers decide and act.