January 12, 2009
Why Two US Antitrust Agencies?
Posted by D. Daniel Sokol
With an increasing push by the FTC to create a different merger review standard and with conduct cases brought under the FTC Act strategically over the use of the Sherman Act, and with a change in administration, maybe we should rethink the institutional structure of US antitrust. Do we really need two agencies? There are a number of different possibilities that this could take:
1. move all but the criminal DOJ work to the FTC (empirical work from the past 15 years suggests that independent agencies lead to better outcomes than executive agencies within the world of complex regulation)
2. move all of the competition work from the FTC to DOJ and make the FTC a consumer protection agency
3. create some very specific slice and dice similar to FERC and the Department of Energy
4. Make formal some of the informal turf allocations between the agencies on mergers
Do readers have any thoughts?
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I have long thought the FTC is a better merger-review agency, but DOJ competes just fine in conduct cases. To me that is a more rational split than criminal-civil, if only because a civil Section 1 case is closer to a criminal Section 1 case than it is to a merger case. The problem with any of the possible changes floated in your post (and with my proposal here), though, is that industry differences are more important than are cause-of-action differences.
Posted by: Max | Jan 12, 2009 10:58:58 AM
History shows that the Congress created the Federal Trade Commission in 1914 because of a concern that the Justice Department may be too influenced by the President.Decisions by the Supreme Court and other federal courts under the Sherman Act of 1890,including the Standard Oil decision in 1912 adopting the rule of reason in Section 1 cases,led some in Congress to be concerned that the Justice Department might not vigorously enforce federal antitrust law.Woodrow Wilson in his 1912 Presidential campaign proposed the creation of a new separate ,independent enfocement agency.
An independent federal agency was created to also have responsibility for the enforcement of the antitrust laws ,including the more specific provisions in the Clayton Act,which was also enacted in 1914.(In more recent history,the Congress authorized state attorneys general to enforce the Sherman Act in 1976 with parens patriae treble damages actions on behalf of state residents.)
If you accept this history,it is doubtful that suggested approach #2 would be agreed to by the Congress.Having two federal antitrust enforcement agencies may be untidy at times,but,overall it has been good for consumers to have two agencies seeking to fairly enforce our antitrust laws.The concentration of all federal antitrust enforcement power in a single agency may appear to be more efficient,but would such concentration advance consumer welfare?
Posted by: David M. Hayes | Jan 13, 2009 11:38:22 AM