The State of Single-Firm Conduct Policy

Posted by D. Daniel Sokol

The US Chamber has published The State of Single-Firm Conduct Policy.

ABSTRACT: On May 11th, Assistant Attorney General Christine Varney withdrew the Section 2 Report (“Report”) that the previous Administration had issued September 8, 2008. Two months prior to the withdrawal, the Chamber authored a piece encouraging observers on all sides of the single-firm conduct policy debate to take a fresh look at the Report. Little did we know that the title of that essay, Bathwater Out. Now What to Do with Economic Analysis? Antitrust Standards for Unilateral Conduct: Sense and Consensus, would foretell the current state of single-firm conduct policy not only in the United States, but throughout the world.
The Chamber is by no means clairvoyant, as the withdrawal came as no surprise. In her confirmation hearings, while being respectful for the contribution the Report made to the debate, Ms. Varney foreshadowed the withdrawal when she expressed serious concerns with its conclusions.

In announcing the withdrawal, the Department of Justice (“DOJ”) press release complained that the Report argued for “extreme caution” with regard to single-firm enforcement. The day after the withdrawal, Ms. Varney spoke before the Chamber and further explained her decision. She indicated she believed in “the need for a clear Department policy regarding enforcement under Section 2.” She further stated that the goal of the joint DOJ and Federal Trade Commission (“FTC”) year-long examination “was to clarify the analytical framework for assessing the legality of single-firm conduct and to provide guidance to the courts, antitrust counselors, and the business community.” She complimented the work that went into the now withdrawn Report stating, “To its credit, the Report provided a comprehensive evaluation of the history of single-firm enforcement and careful consideration of the risks and benefits of particular enforcement strategies.” But she concluded that the conclusions of the report “missed the mark” and that “the greatest weakness of the Section 2 Report is that it raised many hurdles to Government antitrust enforcement.”

While it was clear that the Administration would not let the Report stand, what remains unclear is what exactly is the single-firm conduct policy of the United States and with respect to that policy what it will advocate internationally.