Law Commons^™

Trade Association, State Building, And The Sherman Act: The U.S. Chamber Of Commerce, 1912-25, Laura Phillips Sawyer

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The U.S. Chamber of Commerce (USCC), and "organization of organizations," was conceived in 1912 in coordination with administrators at the Department of Commerce and Labor to promote the collection of commercially valuable trade information. A critical though often neglected, aspect of administrative state building has been the information-gathering and dissemination practices spearheaded by the Department of Commerce and later the Federal Trade Commission (FTC) in conjunction with the USCC. Rather than a strictly adversarial relationship, in the early twentieth century business-government relations created mutually constitutive administrative capacities in both private trade associations and public administrative agencies.

A Response To Commissioner Wright's Proposed Policy Statement Regarding Unfair Methods Of Competition, Maurice Stucke

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Federal Trade Commissioner Joshua Wright recently proposed a new legal standard to evaluate “unfair methods of competition” under Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45(a) (2012).

This essay raises several concerns. First, Wright’s proposed legal standard does not go as far as Congress intended. Moreover it conflates unfair methods of competition with acts and practices that significantly harm consumer welfare. A second concern is that the proposed legal standard goes the other direction and permits conduct that is otherwise illegal under the Sherman and Clayton Acts. Third, the proposed standard reduces accuracy, is hard to administer …

Looking At The Monopsony In The Mirror, Maurice Stucke

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Although still a distant second to monopoly, buyer power and monopsony are hot topics in the antitrust community. Despite the increasing interest in monopsony and buyer power, relatively few cases have actually been brought. Given the relatively few antitrust cases, the legal standards for monopsony claims are less developed than for monopoly claims. In recent years, courts, competition agencies, and scholars in addressing monopsony begin with a simple premise: monopsony is the mirror image of monopoly. But as this Article contends, courts and agencies should be careful when importing monopolization standards for monopsony cases. What works for monopolization claims may …

Is Intent Relevant?, Maurice Stucke

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The role of intent in federal antitrust cases has been characterized as “unsettled” and “controversial.” Many lower courts, scholars, and practitioners recognize that intent evidence is relevant in antitrust cases. But jurists and scholars oriented by neoclassical economic theory disagree.

Using the developments in the behavioral economics literature, this Article reexamines the relevancy of intent evidence in civil antitrust cases. The analysis is organized around two issues: First is intent legally relevant in civil antitrust cases? Second if intent evidence is relevant, for what purpose?

Intent evidence, this Article concludes, is relevant. The behavioral economics experiments confirm what many have …

Behavioral Antitrust And Monopolization, Maurice Stucke

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One hot topic is whether Google has violated the antitrust laws. Another important topic is how behavioral economics can enrich antitrust policy. This Essay examines two implications of behavioral economics on antitrust monopolization law. The Essay first discusses trial-and-error learning as an entry barrier. This is timely given the current debate over the entry barriers of the search engine market.

The Essay next discusses behavioral exploitation to maintain a monopoly. The behavioral economics literature can help explain the European Commission’s tying claims against Microsoft, why the Commission’s original remedy failed, and the benefits and risks of the Commission’s remedy involving …

Reconsidering Antitrust's Goals, Maurice Stucke

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Antitrust policy today is an anomaly. On the one hand, antitrust is thriving internationally. On the other hand, antitrust’s influence has diminished domestically. Over the past thirty years, there have been fewer antitrust investigations and private actions. Today the Supreme Court complains about antitrust suits, and places greater faith in the antitrust function being subsumed in a regulatory framework. So what happened to the antitrust movement in the United States?

Two import factors contributed to antitrust policy’s domestic decline. The first is salience, especially the salience of the U.S. antitrust goals. In the past thirty years, enforcers and courts abandoned …

Occupy Wall Street And Antitrust, Maurice Stucke

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Capitalism, some declare, is in crisis. One concern, which the Occupy Wall Street protesters and many Americans share, is how a relatively small group of corporate and wealthy individuals now wields too much economic influence and control in the United States and the world. The prevailing belief is that financial institutions’ power and influence represent a major threat to America.

So what does antitrust have to say about this public unease? Few would likely believe the Supreme Court’s Standard Oil opinion handed down a century ago would relate to their present concerns. That is unfortunate. The concerns Standard Oil raises …

Behavioral Antitrust, Maurice Stucke, Amanda P. Reeves

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Competition policy is entering a new age. Interest in competition laws has increased world-wide, and the United States no longer holds a monopoly on antitrust policy. In the aftermath of the financial crisis, the question for competition authorities is whether and to what extent does bounded rationality, self-interest and willpower matter. This article explores how the behavioral economics literature will advance competition policy. With increasing interest in the United States and abroad in the implications of behavioral economics for competition policy, this Article first provides an overview of behavioral economics. It next discusses how the assumption of rational, self-interested profit …

Why More Antitrust Immunity For The Media Is A Bad Idea, Maurice Stucke, Allen Grunes

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With their financial difficulties, some traditional media firms have called for greater leniency under the federal antitrust laws. The Federal Trade Commission, for example, in recent hearings inquired as to whether antitrust immunity is necessary for newspapers’ collaboration and under what circumstances, if any, antitrust immunity for certain joint conduct could be justified.

Our essay explores why relaxing the federal antitrust laws for traditional media will not help consumers or the marketplace of ideas. We discuss the past problems with antitrust immunity generally and for the media industries specifically. We address the failures of the Newspaper Preservation Act, how deregulation …

Reconsidering Competition, Maurice Stucke

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In light of the financial crisis and the empirical findings from behavioral economics, policymakers should reconsider the fundamental question: What is competition? Only in understanding competition can one understand what competition can or cannot achieve under certain circumstances.

This Article reexamines one premise of competition, namely the extent to which firms, consumers, and the government are rational and act with perfect willpower. In varying this assumption, the Article maps four scenarios of competition.

Competition authorities should revisit their conception of competition, including the underlying assumptions, to better understand the competitive dynamics in different industries. In engaging in this review, competition …

How Do (And Should) Competition Authorities Treat A Dominant Firm's Deception?, Maurice Stucke

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This Article discusses deception and its potential anticompetitive effects. Since deception lacks any redeeming ethical, moral, or economic justifications, and trust in the marketplace is paramount, multiple laws seek to deter and punish deception. Although the federal antitrust laws seek to deter acts of unfair competition, which historically included a competitor’s deception, some federal courts, recently have erected hurdles for antitrust plaintiffs injured by a monopolist’s deception. Such hurdles are contrary to the Sherman Act's legislative aim, the common law antecedents of the Sherman Act, and other congressional policies. Moreover, the courts’ legal standards for evaluating a monopolist’s deception involving …

Does The Rule Of Reason Violate The Rule Of Law?, Maurice Stucke

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In the past few years, the Supreme Court has been more active in deciding antitrust issues. The Court's choice of legal standards affects future market behavior and the incentives for individuals and organizations to engage in productive activity. Despite its increased activity, the Court never assesses the deficiencies of its rule-of-reason standard under rule-of-law principles. This assessment is critical. This article analyzes the standard's significant deficiencies, and how these deficiencies adversely affect antitrust enforcement and competition policy generally. Perfect compliance with rule-of-law ideals, however, may be unobtainable and undesirable, so the Article recommends several improvements to reorient the rule of …

New Antitrust Realism, Maurice Stucke

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In the midst of a failing economy, the incoming Obama administration will not likely adopt its predecessor's antitrust policies. So if change is afoot, what form should change take? This essay outlines the needed transformative change in today's competition policy. The essay proposes more empirical analysis by the U.S. competition authorities, outlines how behavioral economics can assist in this new antitrust realism, and concludes in explaining why such antitrust realism is needed.

Should The Government Prosecute Monopolies?, Maurice Stucke

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In the past few years, courts and the Department of Justice have cited approvingly the Court's dicta in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP. This article analyzes why the economic thinking in Trinko is wrong, and how the Court ignores its precedent involving the Sherman Act's concerns of monopolies' political, social and ethical implications. It responds to the Court's claim that cartel behavior is easier to identify and remedy than monopolistic behavior and proposes an improvement to the Court's current rule of reason standard to reduce the risk of false positives, while enabling the antitrust …

Better Competition Advocacy, Maurice Stucke

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Today's competition advocacy censures governmental restraints that diminish competition. But such advocacy glosses over four fundamental questions: First, what is competition? Second, what are the goals of a competition policy? Third, how does one achieve, if one can, the objectives of such desired competition? Fourth, how does one know if the economy is progressing toward these goals? This Article outlines the conventional wisdom underlying today's competition advocacy. It examines what is meant by competition, and what is being valued. It examines the goals of competition, as expressed by various governmental agencies, and the structural mechanisms that the government can provide …

When First Amendment Values And Competition Policy Collide: Resolving The Dilemma Of Mixed-Motive Boycotts, Kay P. Kindred

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In a representative democracy, government must protect the rights of its citizens to express ideas, to voice grievances, and to seek to influence government. The first Amendment safeguards these fundamental political rights from government intrusion. In a free market economy, government must protect trade and commerce from activities and influences that lead to increased concentrations of economic power or that otherwise tend to restrain competition. The antitrust laws, specifically the Sherman Act, seek to safeguard the competitive process from restrictive trade practices. Conflict arises when efforts to influence government threaten to undermine competition.

Nowhere is the clash between First Amendment …

Judicial Activism, Economic Theory And The Role Of Summary Judgment In Sherman Act Conspiracy Cases: The Illogic Of Matsushita, James F. Ponsoldt, Marc J. Lewyn

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The proper role of neoclassical economic theory in the resolution of antitrust disputes will continue to be debated into the next administration. The Reagan Administration has succeeded in persuading the Supreme Court to incorporate laissez-faire assumptions and goals into Sherman and Clayton Antitrust Acts jurisprudence in at least three major decisions, although the long-range importance of the holdings in two of those cases remains somewhat in doubt.

One of those decisions, however, reflects more than just a disagreement about application is of the antitrust laws. In Matsushita, the Court, ordering summary judgment for defendants at the urging of the Justice …

The Application Of The Sherman Act Antiboycott Law To Industry Self-Regulation: An Analysis Integrating Nonboyocott Sherman Act Principles, James F. Ponsoldt

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Entry into and competition within professions and many industries is commonly restricted by private regulation among competitors. These restrictions are often effectuated, without direct government participation, through rules, procedures, or standards established by trade or professional organizations. Sometimes, however, the restrictions are made through less formalized concerted decisionmaking procedures by persons potentially in competition with new entrants. Such privately imposed restraints on competition have recently been the focus of an increasing number of private treble damages actions under section 1 of the Sherman Act. In these cases, the plaintiffs have alleged that the defendants were engaged in illegal boycotts, and …

The Expansion Of Horizontal Merger Defenses After General Dynamics: A Suggested Reconsideration Of Sherman Act Principles, James F. Ponsoldt

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Logic suggests that if an agreement between two direct competitors to end a price war, allocate customers or refuse to deal with a third party is plainly anticompetitive and forbidden under applicable federal antitrust laws, then a complete integration between those same two direct competitors is equally anticompetitive and similarly should be forbidden. At one point, Congress thought so and the Supreme Court so held, notwithstanding the obvious business advantages enjoyed by the integrated company. In recent years, however, Congress, the Supreme Court and many commentators have changed their view of horizontal integration, and it is now reasonably possible for …