A Traditional and Textualist Analysis of the Goals of Antitrust: Efficiency, Preventing Theft from Consumers, and Consumer Choice

This Article ascertains the overall purpose of the antitrust statutes in two very different ways. First, it performs a traditional analysis of the legislative history of the antitrust laws by analyzing relevant legislative debates and committee reports. Second, it undertakes a textualist or “plain meaning” analysis of the purpose of the antitrust statutes, using Justice Scalia’s methodology. It does this by analyzing the meaning of key terms as they were used in contemporary dictionaries, legal treatises, common law cases, and the earliest U.S. antitrust cases, and it does this in light of the history of the relevant times. Both approaches demonstrate that the overriding purpose of the antitrust statutes is to prevent firms from stealing from consumers by charging them supracompetitive prices. When firms use their market power to raise prices to supracompetitive levels, purchasers pay more for their goods and services, and these overcharges constitute a taking of purchasers’ property. Economic efficiency was only a secondary concern. In addition, the textualist approach leads to the surprising conclusion that neither the Sherman Act nor the Clayton Act contain an exception for monopolies attained by efficient business conduct. A “plain meaning” analysis of the antitrust statutes reveals that they are supposed to prevent and condemn all privately created monopolies

A Traditional and Textualist Analysis of the Goals of Antitrust: Efficiency, Preventing Theft from Consumers, and Consumer Choice

This Article ascertains the overall purpose of the antitrust statutes in two very different ways. First, it performs a traditional analysis of the legislative history of the antitrust laws by analyzing relevant legislative debates and committee reports. Second, it undertakes a textualist or “plain meaning” analysis of the purpose of the antitrust statutes, using Justice Scalia’s methodology. It does this by analyzing the meaning of key terms as they were used in contemporary dictionaries, legal treatises, common law cases, and the earliest U.S. antitrust cases, and it does this in light of the history of the relevant times. Both approaches demonstrate that the overriding purpose of the antitrust statutes is to prevent firms from stealing from consumers by charging them supracompetitive prices. When firms use their market power to raise prices to supracompetitive levels, purchasers pay more for their goods and services, and these overcharges constitute a taking of purchasers’ property. Economic efficiency was only a secondary concern. In addition, the textualist approach leads to the surprising conclusion that neither the Sherman Act nor the Clayton Act contain an exception for monopolies attained by efficient business conduct. A “plain meaning” analysis of the antitrust statutes reveals that they are supposed to prevent and condemn all privately created monopolies

Are Antitrust "Treble" Damages Really Single Damages?

This Article will show that antitrust violations do not actually give rise to treble damages. When viewed correctly, antitrust damages awards are approximately equal to, or are in fact less than, the actual damages caused by antitrust violations. The article demonstrates this by analyzing the relatively quantifiable harms from antitrust violations, modeling the issues under both deterrence and compensation frameworks. It calculates rough estimates of those factors that affect the magnitude of the antitrust damages multiplier actually awarded. These adjustments to the treble damages multiplier arise from: (1) the lack of prejudgment interest; (2) the effects of the statute of limitations; (3) plaintiffs\u27 attorneys\u27 fees and costs; (4) other costs to plaintiffs pursuing cases; (5) costs to the judicial system in handling antitrust cases; (6) umbrella effects of market power; (7) allocative inefficiency effects of market power; and (8) tax effects. The article then combines these adjustments using both deterrence and compensation frameworks. It compares the sum of the damages caused by antitrust violations to the typical amounts awarded to successful plaintiffs to determine, on average, the true effective ratio of recovery to damages. This analysis show that when all the appropriate adjustments are considered together, awarded damages are, at most, probably at the single level. From either a deterrence or compensation perspective, the Article concludes by discussing some implications of this finding in light of the consensus that antitrust damages should be substantially higher than singlefold to account for detection problems, proof problems, and risk aversion. For these reasons the Article urges that antitrust damages levels be raised by, for example, awarding prejudgment interest

Beyond Chicago: Will Activist Antitrust Arise Again?

There is no need to document the revolution in antitrust that occurred in large part as a result of the rise of the Chicago school of antitrust and the Republicans\u27 1980 election victory. Now that the Democrats are back in office a natural question arises: Will there be a counterrevolution? What are the chances of significantly more aggressive antitrust in the near future

The Intel and Microsoft Settlements

This article briefly compares and contrasts the recent U.S. Federal Trade Commission\u27s antitrust settlement with Intel, and the antitrust cases brought against Microsoft. The article praises the FTC\u27s settlement with Intel, and predicts that history will judge it very favorably compared to the settlement by the U.S. Department of Justice of its antitrust case against Microsoft

Robert Bork\u27s Controversial Legacy

Judge Robert Bork was undeniably one of the towering figures in antitrust history. He advanced the field positively in many respects, articulating a serious critique of excesses of an earlier social-political approach to antitrust. But as one of the conservative movement’s intellectual godfathers he also shares responsibility for many of their own excesses that have transformed our nation in harmful ways. This short essay explores some of the effects of his overall approach to antitrust: his preoccupation with economic efficiency

Revitalizing Section 5 of the FTC Act Using “Consumer Choice” Analysis

This paper makes two points. First, Section 5 of the FTC Act, properly construed, is indeed significantly broader and more encompassing than the Sherman Act or Clayton Act. Section 5 violations include incipient violations of the other antitrust laws, and also violations of their policy or spirit. Second, the best - and probably the only - way to interpret Section 5 in an expansive manner is to do so in a way that also is relatively definite, predictable, principled and clearly bounded. This best can be done if Section 5 is articulated using the consumer choice framework. Without the discipline and constraints provided by this framework, the FTC Act risks becoming unduly standardless. Unless the Commission uses the choice framework, any attempt to construe Section 5 that goes beyond the other antitrust laws risks being viewed as giving undue discretion to the Commission, and for this reason probably will not be permitted by reviewing courts. The paper also presents three illustrations of how this could make a beneficial difference in practice: situations similar to the N Data case, invitations to collude, and incipient tying and exclusive dealing violations

Is Europe Unfairly Attacking Another U.S. High Technology Company?

This short piece considers whether the EU antitrust action against Intel constitutes an example of European regulators attacking a successful US company in order to protect a European competitor, or whether it instead is an example of legitimate law enforcement

Professor Waller\u27s Un-American Approach to Antitrust

Professor Waller asks an un-American question - what can the United States antitrust program learn from the rest of the world? This question is un-American because we in the United States rarely look to others for advice. Besides, we invented antitrust and we were practically alone in the world in enforcing antitrust for almost a century. Only during the current generation have many other nations had active and vigorous antitrust programs. Moreover, the United States is in the business of exporting our accumulated century of antitrust wisdom through a wide variety of methods, and we revel in playing this role. We Americans are generally provincial and unaccustomed to taking advice from the rest of the world in anything, but least of all in the area of antitrust. That is why Professor Waller\u27s suggestion that we do so is un-American