Last month, assistant Attorney General Christine Varney announced plans by the Obama administration to reinvigorate antitrust policy as a step to solve “cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers,” a plan legal critics are warning is on a “collision course” with recent precedent set by the Supreme Court, and by extension, with the constitutional rule of law itself.
For his part, DC Appellate Court Justice Douglas Ginsburg argues that recent Supreme Court decisions show a “more informed approach to antitrust cases”—one that focuses on consumer welfare, which Ginsburg called “the touchstone and the appropriate approach to antitrust analysis.” This was in contrast with past decisions, which Ginsburg decried for their arbitrariness, commenting that “size could be punished one day; low pricing could be punished the next day.” The Supreme Court began to abandon this trend during the Reagan years, when a majority of antitrust cases began, for the first time, to be decided in favor of defendants, Judge Ginsburg told an audience at the CATO Institute.
This trend by the Court reached its peak during the Clinton years when, Ginsburg told his audience, 100 percent of all antitrust cases were decided in favor of the defense. By the time Bush took office, this percentage was still in the high 80’s, a figure that remained in place throughout the Bush years despite the fact that, according to Carl Shapiro of the Justice Department anti-trust division, “cartel enforcement was clearly the top priority for the justice department during the Bush administration.”
At CATO, Shapiro took a less optimistic view of this trend than Justice Ginsburg, defending antitrust regulations such as cartel enforcement and merger scrutiny as “essential to ensure that markets remain competitive.” Moreover, Shapiro argued that despite the Bush administration’s tough stance on cartels, when it came to merger enforcement, “the line was probably drawn too leniently” while Bush was in office. Shapiro acknowledged problems with the enforcement of the antitrust regime during his speech, but exhorted his audience to use existing precedent as their guide to enforcement, while admitting that “antitrust law enforcement in this area is not something that can be done by an automaton. There’s an amount of discretion that’s involved.”
This view was criticized by Dr. Joshua Wright, a law professor at George Mason University, who pointed out that “it is very difficult to get economists and antitrust lawyers to agree on anything” and that “designing the right enforcement requires one to be sensitive.” “What’s the probability that a given contract is pro-competitive or anti-competitive? If we get it wrong, what are the costs going to be to consumers?” Dr. Wright asked rhetorically, before gently challenging Mr. Shapiro’s suggestion that antitrust precedent was a good guide for regulators. “Guidance from [antitrust] cases [is] viewed as insufficient. Perhaps this model of relying on the tried and true case law is a little more problematic than it sounds,” Wright said.
Edwin Rockefeller, author of The Antitrust Religion, took an explicitly confrontational, anti-antitrust rhetorical stance, by contrast. “I don’t speak for the CATO Institute, and the CATO Institute doesn’t speak for me,” Rockefeller said. He later went on to challenge the basic premise of the discussion, arguing that the “problem with [antitrust law] is that it implies that there is such a thing, and there isn’t. There is no coherent body of rules that we can call antitrust law in the way that we can talk about contract law, or tort law, or other sorts of law.” Mr. Rockefeller continued to adopt this iconoclastic perspective during the Question and Answer session, when he characterized the debate over antitrust reform as a “word game.” When asked about antitrust law’s relation to markets, Mr. Rockefeller scoffed. “There is no there there,” he said.