In fact, going to go ahead and edit it in the comment to make it clear (but leave record here of your correction )

The clarification helps. A lot. I think we’re now on the same page both on the law and economics. I’m not decided exactly on what I think makes sense for the optimal liability standard.

Right?

I think the main problem with my initial post was my the use of the term “anticompetitive harm” in the following paragraph:

When it comes to bundled discounts, which generally reflect (or promote) cost-savings and which provide an immediate benefit to consumers, there can be no anticompetitive harm in the form of predation, unreasonable exclusion, or foreclosure if the competitive product is priced above the defendant’s cost once the entire discount is attributed to that product.

I should have instead used the term “unreasonably exclusionary conduct,” which is admittedly a legal, not an economic, characterization.

Now, about safe harbors. Yes, I am most happy to have a safe harbor for bundled discounts that do not induce substantial foreclosure. I am opposed, though, to eliminating the safe harbor for market share-usurping bundled discounts that would pass muster under PeaceHealth. The Masimo court did not recognize two safe harbors: PeaceHealth and “lack of substantial foreclosure.” Instead, it decided that the PeaceHealth safe harbor would not apply, but the lack of substantial foreclosure safe harbor would. In that sense, it is treating the minimal foreclosure safe harbor as a substitute for, not a complement to, the PeaceHealth safe harbor.

For error cost reasons, I don’t think courts should credit any foreclosure-based claims based on bundled discounting (and they therefore wouldn’t need any minimal foreclosure safe harbors) when the bundled discount at issue would pass muster under PeaceHealth.

complement not a substitute for the PH rule you advocate. So maybe we end up in the same place anyway — because I’m not sure you’d do away with the foreclosure safe harbor or would have any reason to object to it as an additional safe harbor.

Your final conclusion is that bundled discounts that pass muster under PH cannot be “unreasonably exclusionary” under the law. I take this to be a legal claim, not an economic one.

I agree with all you say about Section 2 standards. I also do not (and did not in the post just to be clear) claim that RRC was the standard for Section 2 liability. What the right liability rule is a hard question for the reasons you state in the post, i.e. we have to know something about error costs.

I was making a much narrower economic claim. Discounts that pass muster under PH could produce anticompetitive harm. RRC just describes the economic mechanism through which that harm occurs. Your second claim seems to be an economic one. I read it as a sort of
impossibility theorem for discounts that pass muster under PH. That is, if the discounts passed muster they could not be anticompetitive. I read that in the economic sense, i.e. they could not result in a reduction in total or consumer welfare. I still think that’s wrong for the reasons in my post. The RRC economic literature includes a bunch of models under which equally efficient rivals can be excluded and consumer harm results without capital market imperfections. So I don’t think on pure economic theory grounds, the second claim holds up.

Now, we still basically agree.

I’ve written in my own work that those models are not sufficiently empirically verified in the literature (nor robust enough) to provide the basis for policy. But you and I know both know they’ve been influential in the current agencies, overseas, etc. So, long story short, I think (1) gives you ample ammunition to argue for your position on the optimal liability rule. But I still think (2) doesn’t help you.

I think a foreclosure harbor then, which responds directly to the RRC “deprivation of scale” literature, is a complement not a `