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Merger analysis, Sherman Act, Antitrust innovation


Antitrust and Trade Regulation


Each antitrust administration, both at the Department of Justice and the Federal Trade Commission, has its theme—one or a few areas of antitrust enforcement that it wants to pay particular attention to and in that way be identified with. And, as part of this emphasis, administrations often seek to innovate in some way or another, to do something different, or in a different way than previous administrations.

One factor stimulating innovation in antitrust enforcement is simply that new people with new ideas come into a new job. Sometimes those new people bring with them ideas that they had been developing in the private sector (Richard Gilbert, the former Deputy Assistant Attorney General for Economics, for example, has long been associated with the economics of R&D; and Diane Wood, the former Deputy Assistant Attorney General for International Antitrust, has long been known for her special interest in the international aspects of antitrust).

In other cases the innovation is deliberate, and in part the natural and generally laudable consequence of wanting to appear to be innovative, of wanting to be seen as having fresh ideas or approaches. And this, in turn, is no doubt linked to the great demands on antitrust officials to give speeches. (In a recent issue of FTC Watch I noted approximately thirty-five scheduled speeches by FTC or DOJ officials in the period March 14-April 25.) No one likes to give speeches without having something to say, and a speech which simply says "business as usual," or even "we are going to work hard and do an even better job on the usual matters," is not likely to make the evening news, however reassuring such a pronouncement might be to the audience or the business community at large.

In any event, the themes emerge. For example, I think of Thomas Kauper as being associated with the program of regulatory intervention, and Donald Baker with tougher sentences for price-fixers. John Shenefield will forever be associated with "shared monopoly," and James Rill emphasized the international aspects of antitrust enforcement. Over at the FTC, I think of Kevin Arquit and "invitations to collude," and Terry Calvani and "nonprice predation." Right now, the main innovation of the current DOJ team is innovation itself, and we want to try to understand what this means for us and our clients in terms of actual antitrust enforcement.

But this brief commentary on the origins of innovation in antitrust has a purpose, and it is to remind us that there is often a significant gap between what an administration says is its main focus and what the administration actually does. The plain vanilla truth is that the day-to- day business of the antitrust agencies has not changed dramatically in twenty years. Every hint of horizontal price fixing is investigated vigorously and prosecuted where appropriate, all major horizontal mergers are evaluated, and that's about it. There are, and always have been, few government-filed vertical cases or monopolization cases. And that probably is a sensible allocation of resources given the paucity of reasonable candidates and the ability of private plaintiffs to address them. (The Microsoft matter may serve as a good example of the problems of pursuing monopolization cases that no private plaintiff has been willing or able to mount successfully.)

Put somewhat less politely, speeches often reflect more what an administration would like to do, or would like its audience to think that it will do, rather than what it has done, is now doing, or will actually do in the near future. (By way of example, I note that, during the period 1978-1980, the ratio of speeches about shared monopoly to shared monopoly cases filed was very high. The same could be said about nonprice predation and invitations to collude.) I will come back to this towards the end, but I think a fair warning about innovations with respect to innovation is to watch what they do, not what they say.

Publication Citation

George A. Hay, "Innovations in Antitrust Enforcement", 64 Antitrust Law Journal (1995-1996)