Tuesday, July 25, 2017

A Better Deal for Antitrust?

The Democratic Party has unveiled "A Better Deal" which includes a significant discussion of antitrust and competition policy themes.

There is central emphasis on the importance of competition policy, particularly a focus on concentration and in mergers.  

The three parts of A Better Deal are:

  • Prevent big mergers that would harm consumers, workers, and competition. 
  • Require regulators to review mergers after completion to ensure they continue to promote competition. 
  • Create a 21st century ‘Trust Buster’ to stop abusive corporate conduct and the exploitation of market power where it already exists. 

Some of the themes are tied to things that our current antitrust institutions do well and may be critiques of specific deals.  Other parts embrace an antitrust populism that has not existed since the 1960s and would require a new institutional structure.  It is this part of the agenda of significant change that turns its back on both Clinton and Obama antitrust.  Looking at issues such as employment in antitrust review is a real shift away from antitrust as a technocratic area to one that focuses more on antitrust populism. Back in 2012 when Jack Kirkwood, Bob Lande and Barak Orbach organized a Goals of Antitrust conference at GW that appeared in the Fordham Law Review, I thought that the goals of antitrust were more or less settled (contentious at the margins but really only at the margins) with antitrust populism more or less pronounced dead.  Only a few years later antitrust populism is growing, particularly by those outside of the field.  Within the field there are both law professors (e.g., Tim Wu) and economics professors (e.g., Fiona Scott Morton) pushing for the need for greater antitrust populism, although this view is not mainstream.  When I think of the many capable Democratic antitrust enforcers at both agencies - Bob Pitofsky, Joel Klein, Christine Varney, Sharis Pozen, Bill Baer, Renata Hesse, Edith Ramirez among agency heads (to offer a non-exhaustive list and if I omitted you or your friend it was inadvertent) and many highly capable economists such as Carl Shapiro, Joe Farrell, Rich Gilbert, Ginger Gin, Francine Lafontaine, Howard Shelanski, Dan Rubinfeld, Jon Baker (again, if I didn't list you or your friends among economists, this list is not exhaustive - give me a break, it is 6:54am and I am rushing to post this while the kids eat breakfast) this antitrust populism suggests an indictment of their record. I think that overall, antitrust has made the life of American consumers better for the past 30 years.

Why the pushback against economic analysis now?  How much of this is due to antitrust specific causes and how much to a broader distrust of markets post Great Recession I do not know.  Our economic tools and analytical abilities are better now than in 1975.  For me 1975 is a defining moment because it is when Mike Scherer explained before Congress that the then enforcement of the populist Robinson Patman statute hurt consumers (Recent Efforts to Amend or Repeal the Robinson-Patman Act—Part 2: Hearings Before
the Ad Hoc Subcomm. on Antitrust, the Robinson-Patman Act, and Related Matters of the H. Comm. on Small Bus., 94th Cong. 141 (1975) statement of Frederic M. Scherer, Director, Bureau of Economics, FTC). In 1977, DOJ Antitrust released its own report on Robinson Partman, describing the Act “protectionist” with a “deleterious impact on competition.”

What has been a consensus across political parties for decades in antitrust to protect consumers and promote innovation is now being fundamentally questioned. 


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