Antitrust is Law Enforcement
At the end of October, Jonathan Baker, Fiona Scott Morton, and I organized a day-long conference entitled Unlocking the Promise of Antitrust Enforcement. Our premise was simple: In a time when the purpose and future of antitrust is again an important topic of political discourse, we need to understand what antitrust enforcers can do today with the laws that exist right now. Laws that have been on the books for a long time – The Sherman Act was passed in 1890 – but which retain their vitality. And their importance.
The conference, which was sponsored by the Washington College of Law at American University and the Washington Center for Equitable Growth, featured nine presentations from a series of extraordinarily-distinguished economists and lawyers. And these presentations will be published next Spring in a special issue of the Yale Law Journal.
I see one simple idea at the heart of the nine presentations: Antitrust is law enforcement.
We might not immediately relate the creation of econometric models to the work of the cop on the beat. And they are very different. But what they share is fidelity to the principle that we are a government of laws, not of men and women.
Some suggest that antitrust enforcers should exercise regulatory humility – that is to say – to recognize the limits of regulatory action. For example, the difficulty of acquiring the knowledge needed to justify a regulatory decision is cited in support of regulatory humility. Of course, the difficulty of acquiring the certainty that inaction on the part of the competition enforcer will surely benefit consumers also calls for humility.
I believe in humility – it is a personal value of great importance, if one not always displayed today. And I certainly believe that antitrust enforcers should understand the limits of their knowledge. In fact, nothing brings that home more forcefully than the idea that an antitrust agency will need to prove its case in court against a defendant that will push back hard to poke holes in the government’s view of the law, economics, and evidence. To write a complaint that will be argued before a federal judge is to contemplate quite deeply what knowledge is needed to prevail – and where one’s knowledge may not yet be up to snuff. At the same time, the decision to not bring an antitrust enforcement is almost entirely unreviewable, in court or by the public.
In any event, regulation and law enforcement are not the same. An antitrust enforcer is not creating a new industry structure through a series of broad prescriptions, sound though they may be. An antitrust enforcer works with a team that is culling through the facts, using economics as a potent tool to understand the patterns of evidence, examining precedent, and using legal skills to construct theories of harm. In conduct cases, the process is about what happened. In merger reviews, the task is predictive, asking what can be expected to happen, but just as intensely focused on the facts and law and economics at hand.
Nor is an antitrust enforcer’s only guidepost the creation of certainty. Guidance to industry, to the bar, and to the public is, of course, important; the antitrust agencies’ reiteration of the Horizontal Merger Guidelines is an example of their work to allow companies to conform their behavior to established standards. But law enforcement, within the accepted boundaries of due process, has an equal obligation to the application of law to new and novel circumstances that intensive factual investigation reveals. Because facts matter.
Filing a lawsuit means being put to the test. It means making very serious allegations against companies and, sometimes, against individuals. It means being willing, in the case of the Department of Justice, to stand up in court to act as a lawyer appearing on behalf of the United States of America. Sometimes bringing criminal charges; sometimes filing a civil complaint.
Most of all it is wrestling with what is right and what is wrong as defined by the antitrust laws. I’ve heard the process of such decision-making described as lonely. I think it’s better to say that it is weighty.
And it’s intensely practical. It’s not uncommon for very sophisticated economic analysis to predict that a company would not have any incentive to take an anti-competitive action, for example, that it would want to limit the supply of a good whose consumption drives use of the company’s own products. But then the internal documents show up demonstrating that executives at the highest levels of the company believe exactly the opposite. Or facts appear, as in the healthcare context, that force revision of economic understanding. It’s not that the economic analysis was wrong as a matter of theory; it’s that the real evidence proves that dangers to competition exist that might not have been fully appreciated. Economic theory was an essential guide; documents and testimony were the proof.
So the purpose of this conference was to launch a new set of discussions about how antitrust enforcement can proceed to tackle new challenges. All to the purpose of preserving competition; competition that serves consumers and economic opportunity.
To say all this is just to say that as law enforcers, the obligation of antitrust enforcers is to be faithful to the law and, just as importantly, to never blink the facts.
Jon Sallet is a Benton Senior Fellow. His work focuses on policies to preserve and protect internet openness, to advance competition more broadly, including through antitrust, and to support FCC actions to protect privacy, security, and broadband deployment. Jon was the FCC General Counsel/Acting General Counsel (2013-2016), and Deputy Assistant Attorney General for Litigation, Antitrust Division, US Department of Justice (2016-2017). Currently, Jon is a partner at Steptoe & Johnson LLP and provides pro bono legal representation for the Benton Foundation.