Friday, December 05, 2003

Antitrust News: Building a Bridge Back to the 1980s (or Maybe the 1890s)

In a recent speech, FTC Chairman Timothy Muris slammed the American Antitrust Institute:
Those who wish to expand enforcement in ways that would retard the progression in recent decades toward sensible substantive and institutional norms now have an organization dedicated to that end, the American Antitrust Institute (AAI). The group's leaders call for enforcement that would disregard the prudent limitations observed in recent decades. Recommended areas of expansion include fuller use of per se rules, a return to 1970's style attacks on distributional restraints, greater reliance on structural presumptions against mergers, resurrection of the incipiency doctrine in merger cases, unprecedented expansion of alleged monopsony in merger cases, more emphasis on condemning price cutting, and even a return to the use of non-economic values in antitrust decision making. Although some of these individuals have produced important contributions to the modern antitrust consensus, enactment of their enforcement agenda would shatter that consensus, and return antitrust to its pre-1981 imperialism.
The theme of Muris’ speech, given to the American Bar Association’s antitrust section, was how the Bush administration’s antitrust enforcement strikes—at long last—a proper balance. Muris dismissed pre-1981 antitrust enforcement policy as too rigid, and the Reagan administration (which he worked for) as too soft. Somehow I doubt the businesses that have been prosecuted by Muris' FTC staff find the current antitrust approach "just right."

There is some merit to Muris’ argument. AAI is a radical organization that wants all economic decisions to be made by antitrust lawyers. I don’t think the FTC endorses that position, although sometimes they act like they do. Muris has his pet projects: destroying physician rights, nitpicking mergers in the food industry, and weakening intellectual property. But Muris is still not as bad the AAI people would like him to be. I have yet to read about a single merger or competition case where AAI isn’t screaming at the top of their Ivory-tower academia lungs for blood.

But then again, it’s unfair to criticize AAI for wanting to return to the pre-1981 imperialist age of antitrust. Personally I’d like to return to the past as well—to pre-1890, before antitrust even existed.

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