Law Commons^™

Getting Merger Guidelines Right, Keith N. Hylton

Faculty Scholarship

This paper is on the new Merger Guidelines. It makes several arguments. First, that the Guidelines should be understood as existing in a political equilibrium. Second, that the new structural presumption of the Merger Guidelines (HHI = 1,800) is too strict, and that an economically reasonable revision in the structural presumption would have increased rather than decreased the threshold. Whereas the new Guidelines lowers the threshold to HHI 1,800 from HHI 2,500, an economically reasonable revision would have increased the threshold to HHI 3,200. I justify this argument using a bare-bones model of Cournot competition. Third, it seems unlikely, …

Researching Antitrust Law, Keith Lacy

Law Librarian Scholarship

Antitrust is a dynamic area of law subject to rapid change. It is highly sensitive to the attitudes of regulators and market conditions, always looking forward to how decisions made today will affect businesses and the lives of individual consumers. Current events — and passionate consumers, or fans — can incur “Swift” antitrust scrutiny, as Live Nation Entertainment discovered recently.

Yet it is inextricably linked to more abstract considerations. The term “antitrust” is itself archaic, reflecting animosity to a business practice innovated by Standard Oil in 1882. Understanding the history of antitrust actions often requires understanding something of history broadly …

Textualism As An Ally Of Antitrust Enforcement: Examples From Merger And Monopolization Law, Robert H. Lande

Utah Law Review

This Article will first briefly present an overview of the textualist method of statutory interpretation. It will then briefly engage in a textualist analysis of important portions of two antitrust statutes: Section 2 of the Sherman Act and Section 7 of the Clayton Act. At least in these areas, textualist analysis should, if anything, help re-invigorate antitrust enforcement.

Reviving Antitrust Enforcement In The Airline Industry, Jonathan Edelman

Michigan Law Review

The Department of Transportation (DOT) has broad but oft overlooked power to address antitrust issues among airlines through section 411 of the Federal Aviation Act. However, the DOT’s unwillingness to enforce antitrust more aggressively may be translating into higher fares and fees for airline travelers.

More aggressive antitrust enforcement is urgently needed. Recent research has revealed a widespread practice of common ownership in the airline industry, whereby investment firms own large portions of rival airline companies. Although this practice leads to higher prices and reduced competition, antitrust regulators, from the DOT to the Department of Justice and the Federal Trade …

Privity Vs. Proximity: The Supreme Court’S Erroneous Reading Of The Illinois Brick Doctrine In Apple Inc. V. Pepper, Suzin A. Win

Golden Gate University Law Review

The rapid development of the digital marketplace led the United States Supreme Court to revisit the forty-two year old antitrust precedent set in Illinois Brick Co. v. Illinois. In Illinois Brick, the Supreme Court decided that under Section 4 of the Clayton Act, direct purchasers have standing to sue for treble damages due to unfair business practices, while indirect purchasers do not. Over four decades later, in Apple Inc. v. Pepper, the Court reevaluated this doctrine. This time, the Court had to determine which party received the “direct purchaser” status in a situation where plaintiffs bought apps from …

Farmer Cooperatives "Take Cover": The Capper-Volstead Exemption Is Under Siege, Donald M. Barnes, Jay L. Levine

Arkansas Law Review

"When tillage begins, other arts follow. The farmers, therefore, are the founders of human civilization." There can be little dispute that food production is of vital interest to any nation’s security and economy. For this reason, the United States Congress, like many other legislatures around the world, has accorded special treatment to the agricultural industry, and particularly to farmers. One example of this special treatment is the Capper-Volstead Act, which provides farmers with immunity from antitrust liability for joint conduct undertaken by and through an “association” of producers.

The Case For Preemptive Oligopoly Regulation, Jeffrey D. Manns

Indiana Law Journal

One of the few things former President Donald Trump and leading Democrats appear to agree on is the need to subject Big Technology (“Big Tech”) firms to antitrust scrutiny. But unsurprisingly they disagree about how to address the problem. Senator Elizabeth Warren and many other leading Democrats have called for breaking up large technology firms, such as Google, Amazon, and Facebook, in a revival of the trust-busting progressive era of the early twentieth century. In contrast, the Trump administration triggered more traditional antitrust monopoly review of potential anticompetitive activities of a number of leading technology firms, which is more likely …

Mere Common Ownership And The Antitrust Laws, Thomas A. Lambert

Faculty Publications

"Common ownership," also called "horizontal shareholding," refers to a stock investor's ownership of minority stakes in multiple competing firms. Recent empirical studies have purported to show that institutional investors' common ownership reduces competition among commonly owned competitors. "Mere common ownership" is horizontal shareholding that is not accompanied by any sort of illicit agreement, such as a hub-and-spoke conspiracy, or the holding of a control-conferring stake. This Article considers the legality of mere common ownership under the U.S. antitrust laws. Prominent antitrust scholars and the leading treatise have concluded that mere common ownership that has the incidental effect of lessening market …

Antitrust: What Counts As Consumer Welfare?, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust’s consumer welfare principle is accepted in some form by the entire Supreme Court and the majority of other writers. However, it means different things to different people. For example, some members of the Supreme Court can simultaneously acknowledge the antitrust consumer welfare principle even as they approve practices that result in immediate, obvious, and substantial consumer harm. At the same time, however, a properly defined consumer welfare principle is essential if antitrust is to achieve its statutory purpose, which is to pursue practices that injure competition. The wish to make antitrust a more general social justice statute is understandable: …

Exclusive Dealing, The Theory Of The Firm, And Raising Rivals' Costs: Toward A New Synthesis, Alan J. Meese

Alan J. Meese

No abstract provided.

Anticompetitive Mergers In Labor Markets, Ioana Marinescu, Herbert J. Hovenkamp

Indiana Law Journal

Mergers of competitors are conventionally challenged under the federal antitrust laws when they threaten to lessen competition in some product or service market in which the merging firms sell. In many of these cases the threat is that in concentrated markets—those with only a few sellers—the merger increases the likelihood of collusion or collusion-like behavior. The result will be that the post-merger firm will reduce the volume of sales in the affected market and prices will rise.

Mergers can also injure competition in markets in which the firms purchase, however. Although that principle is widely recognized, very few litigated cases …

Taking Antitrust Away From The Courts, Ganesh Sitaraman

Ganesh Sitaraman

A small number of firms hold significant market power in a wide variety of sectors of the economy, leading commentators across the political spectrum to call for a reinvigoration of antitrust enforcement. But the antitrust agencies have been surprisingly timid in response to this challenge, and when they have tried to assert themselves, they have often found that hostile courts block their ability to foster competitive markets. In other areas of law, Congress delegates power to agencies, agencies make regulations setting standards, and courts provide deferential review after the fact. Antitrust doesn’t work this way. Courts – made up of …

Making Meaning: Towards A Narrative Theory Of Statutory Interpretation And Judicial Justification, Randy D. Gordon

Randy D. Gordon

The act of judging is complex involving finding facts, interpreting law, and then deciding a particular dispute. But these are not discreet functions: they bleed into one another and are thus interdependent. This article aims to reveal-at least in part-how judges approach this process. To do so, I look at three sets of civil RICO cases that align and diverge from civil antitrust precedents. I then posit that the judges in these cases base their decisions on assumptions about RICO's purpose. These assumptions, though often tacit and therefore not subject to direct observation, are nonetheless sometimes revealed when a judge …

Anticompetitive Mergers In Labor Markets, Ioana Marinescu, Herbert J. Hovenkamp

All Faculty Scholarship

Mergers of competitors are conventionally challenged under the federal antitrust laws when they threaten to lessen competition in some product or service market in which the merging firms sell. Mergers can also injure competition in markets where the firms purchase. Although that principle is widely recognized, very few litigated cases have applied merger law to buyers. This article concerns an even more rarefied subset, and one that has barely been mentioned. Nevertheless, its implications are staggering. Some mergers may be unlawful because they injure competition in the labor market by enabling the post-merger firm anticompetitively to suppress wages or salaries. …

Taking Antitrust Away From The Courts, Ganesh Sitaraman

Vanderbilt Law School Faculty Publications

A small number of firms hold significant market power in a wide variety of sectors of the economy, leading commentators across the political spectrum to call for a reinvigoration of antitrust enforcement. But the antitrust agencies have been surprisingly timid in response to this challenge, and when they have tried to assert themselves, they have often found that hostile courts block their ability to foster competitive markets. In other areas of law, Congress delegates power to agencies, agencies make regulations setting standards, and courts provide deferential review after the fact. Antitrust doesn’t work this way. Courts – made up of …

Healthcare Mergers And Acquisitions In An Era Of Consolidation: A Review And A Call For Agency Collaboration In Antitrust Enforcement, Anna Molinari

Pepperdine Law Review

Healthcare companies are consolidating at an alarming rate. From hospitals, to providers’ offices, to insurance companies, there are increasingly fewer consumer choices and more monopolies, which calls for heightened antitrust enforcement. Interestingly, antitrust enforcement authority in the healthcare industry is shared between the Federal Trade Commission (FTC), which presides over hospital and provider mergers, and the Department of Justice (DOJ), which presides over health insurance mergers. Although the FTC has challenged many hospital and provider mergers, the DOJ has only challenged six health insurance mergers. Furthermore, last year, the DOJ ultimately approved all health insurance mergers. In 2017, in United …

The Merger Incipiency Doctrine And The Importance Of "Redundant" Competitors, Peter C. Carstensen, Robert H. Lande

All Faculty Scholarship

The enforcers and the courts have not implemented the merger incipiency doctrine in the vigorous manner Congress intended. We believe one important reason for this failure is that, until now, the logic underlying this doctrine has never been explained. The purpose of this article is to demonstrate that markets’ need for “protective redundancy” explains the incipiency policy. We are writing this article in the hope that this will cause the enforcers and courts to implement significantly more stringent merger enforcement.

To vastly oversimplify, the current enforcement approach assumes that if N significant competitors are necessary for competition, N-1 competitors could …

Were The 1982 Merger Guidelines Old News?, Alan J. Meese, Sarah L. Stafford

Faculty Publications

This paper examines the impact of the 1982 Department of Justice Merger Guidelines on the stock market prices of publicly traded firms in the United States. We argue that those Guidelines were perceived by the market as a real change in enforcement policy that would result in substantial deregulation of mergers throughout the economy. We conduct an event study of S&P 500 firms to test this hypothesis and find evidence of a significant positive effect on the stock prices of firms in moderately concentrated industries subject to antitrust regulation, the firms for which the 1982 Guidelines articulate a substantially less …

Making Meaning: Towards A Narrative Theory Of Statutory Interpretation And Judicial Justification, Randy D. Gordon

Randy D. Gordon

The Foreign Trade Antitrust Improvements Act: Do We Really Want To Return To American Banana?, Joseph P. Bauer

Maine Law Review

It keeps getting worse and worse. Over the past three and a half decades, the Supreme Court has made countless changes to substantive antitrust doctrine, making successful assertion of an antitrust claim more and more difficult. We have known for at least a century—at least since the Standard Oil decision—that the language in section 1 of the Sherman Act, providing that “every contract, combination . . . , or conspiracy, in restraint of trade . . . , is declared to be illegal” is not to be read literally. “Every” does not mean “every.” It means only “some”—generally, only those …

Equitable Relief For Private Rico Plaintiffs: Using Donziger To Remedy Courthouse Corruption, Anna Hanke

Journal of Law and Policy

In Chevron Corp. v. Steven Donziger, the Southern District of New York granted Chevron an injunction against Donziger under the Racketeer Influenced and Corrupt Organizations (RICO) Act, preventing the enforcement of an Ecuadorean judgment against it in the United States. This Note discusses the circuit court split on whether injunctive relief may be granted in a civil RICO suit, arguing that injunctive relief is an available remedy within the statute’s plain meaning, legislative intent, and evolving jurisprudence of civil RICO. The Note applies the Donziger interpretation of RICO to a case of a similarly corrupted judgment, Caperton v. A.T. Massey …

Labor And The Origins Of Civil Procedure, Luke P. Norris

Law Faculty Publications

A series of changes within civil procedure over the past few decades—including the rise of private arbitration, the accompanying decline of public adjudication, and the erection of barriers to class actions—have diminished the economic power of workers, consumers, and diffuse economic actors. This Article demonstrates that avoiding these economic consequences was a central goal of those who crafted American federal civil procedure in the first place. Driven to action by the procedural issues involved in labor injunction cases, leading procedural reformers behind the modern regime strove to make American federal civil procedure sensitive to questions of political economy and designed …

Equitable Relief For Private Rico Plaintiffs: Using Donziger To Remedy Courthouse Corruption, Anna Hanke

Journal of Law and Policy

In Chevron Corp. v. Steven Donziger, the Southern District of New York granted Chevron an injunction against Donziger under the Racketeer Influenced and Corrupt Organizations (RICO) Act, preventing the enforcement of an Ecuadorean judgment against it in the United States. This Note discusses the circuit court split on whether injunctive relief may be granted in a civil RICO suit, arguing that injunctive relief is an available remedy within the statute’s plain meaning, legislative intent, and evolving jurisprudence of civil RICO. The Note applies the Donziger interpretation of RICO to a case of a similarly corrupted judgment, Caperton v. A.T. Massey …

Making Meaning: Towards A Narrative Theory Of Statutory Interpretation And Judicial Justification, Randy D. Gordon

Faculty Scholarship

The act of judging is complex involving finding facts, interpreting law, and then deciding a particular dispute. But these are not discreet functions: they bleed into one another and are thus interdependent. This article aims to reveal-at least in part-how judges approach this process. To do so, I look at three sets of civil RICO cases that align and diverge from civil antitrust precedents. I then posit that the judges in these cases base their decisions on assumptions about RICO's purpose. These assumptions, though often tacit and therefore not subject to direct observation, are nonetheless sometimes revealed when a judge …

Astroturf Campaigns: Transparency In Telecom Merger Review, Victoria Peng

University of Michigan Journal of Law Reform

Large telecommunications companies looking to merge spend millions of dollars in their lobbying efforts to clear regulatory hurdles and obtain approval for their proposed mergers. Corporations such as AT&T, Comcast, and Time Warner use public participation processes as vehicles to influence regulatory decision-making. In the Federal Communications Commission (FCC) merger review context, the notice- and-comment process and public hearings have become fertile breeding grounds for hidden corporate influence. Corporations spend millions on corporate social responsibility programs and call upon nonprofit organizations that receive their largesse to represent their corporate interests as grassroots interests when the FCC seeks public comment. This …

The New Road To Serfdom: The Curse Of Bigness And The Failure Of Antitrust, Carl T. Bogus

University of Michigan Journal of Law Reform

This Article argues for a paradigm shift in modern antitrust policy. Rather than being concerned exclusively with consumer welfare, antitrust law should also be concerned with consolidated corporate power. Regulators and courts should consider the social and political, as well as the economic, consequences of corporate mergers. The vision that antitrust must be a key tool for limiting consolidated corporate power has a venerable legacy, extending back to the origins of antitrust law in early seventeenth century England, running throughout American history, and influencing the enactment of U.S. antitrust laws. However, the Chicago School’s view that antitrust law should be …

Quality-Enhancing Merger Efficiencies, Roger D. Blair, D. Daniel Sokol

D. Daniel Sokol

The appropriate role of merger efficiencies remains unresolved in US antitrust law and policy. The Patient Protection and Affordable Care Act (ACA) has led to a significant shift in health care delivery. The ACA promises that increased integration and a shift from quantity of performance through increased competition will create a system in which quality will go up and prices will go down. Increasingly, due to the economic trends that respond to the ACA, including considerable consolidation both horizontally and vertically, it is imperative that the antitrust agencies provide an economically sound and administrable legal approach to efficiency enhancing mergers. …

Standing In The Way Of The Ftaia: Exceptional Applications Of Illinois Brick, Jennifer Fischell

Michigan Law Review

In 1982, Congress enacted the Foreign Antitrust Trade Improvements Act (FTAIA) to resolve uncertainties about the international reach and effect of U.S. antitrust laws. Unfortunately, the FTAIA has provided more questions than answers. It has been ten years since the Supreme Court most recently interpreted the FTAIA, and crucial questions and circuit splits abound. One of these questions is how to understand the convergence of the direct purchaser rule (frequently referred to as the Illinois Brick doctrine) and the FTAIA. Under the direct purchaser rule, only those who purchase directly from antitrust violators are typically permitted to sue under section …

Balancing Effects Across Markets, Daniel A. Crane

Articles

In Philadelphia National Bank (PNB), the Supreme Court held that it is improper to weigh a merger's procompetitive effects in one market against the merger's anticompetitive effects in another. The merger in question, which ostensibly reduced retail competition in the Philadelphia area, could not be justified on the grounds that it increased competition against New York banks and hence perhaps enhanced competition in business banking in the mid-Atlantic region. I will refer to the Supreme Court's prohibition on balancing effects across markets as a "market-specificity" rule. Under this rule, efficiencies that may counterbalance anticompetitive aspects must be specific to …

Quality-Enhancing Merger Efficiencies, Roger D. Blair, D. Daniel Sokol

UF Law Faculty Publications

The appropriate role of merger efficiencies remains unresolved in US antitrust law and policy. The Patient Protection and Affordable Care Act (ACA) has led to a significant shift in health care delivery. The ACA promises that increased integration and a shift from quantity of performance through increased competition will create a system in which quality will go up and prices will go down. Increasingly, due to the economic trends that respond to the ACA, including considerable consolidation both horizontally and vertically, it is imperative that the antitrust agencies provide an economically sound and administrable legal approach to efficiency enhancing mergers. …