Document Type
Essay
Publication Title
Cornell Law Review Online
Publication Date
2020
Volume
105
First Page
31
Abstract
(Excerpt)
In an essay published in the mid-1960s, historian Richard Hofstadter posed a question that was as simple as it was profound: What happened to the antitrust movement in America? Hofstadter observed that Americans had lost their zeal for antitrust and that antitrust enforcement had become unmoored from its trust-busting roots. Ironically, the antitrust enforcement scene that Hofstadter lamented a half-century ago would appear robust compared to antitrust enforcement today. Accordingly, Hofstadter’s question is perhaps even more relevant now than it was fifty-five years ago.
Antitrust in America stands at a crossroads. As Professor Herbert Hovenkamp has observed “[a]ntitrust in the United States today is caught between its pursuit of technical rules designed to define and implement defensible economic goals, and increasingly political calls for a new antitrust ‘movement.’” The Supreme Court once exalted the antitrust laws, in general, and the Sherman Act, in particular, as the “Magna Carta of free enterprise,” but judicial construction has narrowed their reach significantly over the past forty years. Technical rules have triumphed over more traditional goals, sociopolitical freedom and cabining the power of big business. The prevailing view today is that antitrust laws should be implemented to maximize consumer welfare. The consumer welfare model in turn relies heavily on Chicago School economic theory with its emphasis on efficiency, self-correcting markets populated by rational, self-interested participants, administrable rules and minimalist intervention. Specifically, the model posits that market power is not sustainable because entry will counteract any price rises resulting from the exercise of that market power. Not surprisingly, the current antitrust public enforcement scene reflects that minimalist approach. Although the agencies still pursue cartels with gusto, they rarely challenge mergers or single firm conduct, including refusals to deal and exclusionary behavior by dominant firms. Enforcers have tolerated behemoths in high tech, big data, retailing, telecommunications, and entertainment with the expectation that size will generate efficiencies and foster innovation. Paradoxically, “the antitrust laws, which were rooted in deep suspicion of concentrated private power, now often promote it.”
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Available at: https://www.cornelllawreview.org/2020/01/10/a-2020-agenda-for-re-invigorated-antitrust-enforcement-four-big-ideas/