Vigorous Antitrust Enforcement in this Challenging Era
Christine A. Varney
Assistant Attorney General. Antitrust Division. U.S. Department of Justice.
Remarks as Prepared for the Center for American Progress
May 11, 2009
"Lessons Learned From Prior Economic Crises
[...]
I have considered the Government's response to the market conditions that followed the Great Depression, and I believe there are important lessons we can learn from that era [...] Competition was relegated to the sidelines, as the welfare of firms took priority over the welfare of consumers.
[...]
The lessons learned from this historical example are twofold. First, there is no adequate substitute for a competitive market, particularly during times of economic distress. Second, vigorous antitrust enforcement must play a significant role in the Government's response to economic crises to ensure that markets remain competitive.
[...]
Actions Ahead: Enforcement Priorities
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In September 2008, after review and analysis of the extensive hearing record, the Department of Justice issued its report, entitled 'Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act.' The Section 2 Report reflects a significant effort by my predecessors and the FTC in collecting and evaluating the opinions and expertise of antitrust enforcement officials from the United States and abroad, leading economists and legal scholars, antitrust practitioners, and representatives of the business community. To its credit, the Report provides a comprehensive evaluation of the history of single-firm enforcement and careful consideration of the risks and benefits of particular enforcement strategies. The Report's ultimate conclusions, however, miss the mark. In my view, the greatest weakness of the Section 2 Report is that it raises many hurdles to Government antitrust enforcement.
At the core of the Section 2 Report are several critiques of 1960s antitrust enforcement policy, which, taken to their extremes, counsel in favor of a significant limitation of Section 2 enforcement. The Report sounds a call of great skepticism regarding the ability of antitrust enforcers – as well as antitrust courts – to distinguish between anticompetitive acts and lawful conduct, and raises the related concern that the failure to make proper distinctions may lead to 'over-deterrence' with regard to potentially procompetitive conduct. I do not share these concerns. I strongly believe that antitrust enforcers are able to separate the wheat from the chaff in identifying exclusionary and predatory acts. As Judge Posner explained, 'antitrust doctrine is supple enough to take in stride the competitive issues presented by the new economy.'
The Section 2 Report also characterizes a dominant firm's ability to act efficiently as a core concern in evaluating any possible anticompetitive impact of its conduct. There is no dispute that the evaluation of potential economic efficiencies is an important aspect of the analysis of firm conduct. The Report, however, goes too far in evaluating the importance of preserving possible efficiencies and understates the importance of redressing exclusionary and predatory acts that result in harm to competition, distort markets, and increase barriers to entry. The ultimate result is that consumers are harmed through higher prices, reduced product variety, and slower innovation. Accordingly, I believe the Section 2 Report loses sight of an ultimate goal of antitrust laws – the protection of consumer welfare.
With its twin bases for skepticism, the Report counsels in favor of the exercise of extreme caution in enforcing Section 2 and calls for the adoption of a number of safe harbors for certain conduct within its reach. While there is no question that Section 2 cases present unique challenges (for example, in the fashioning of injunctive remedies), the Report advocates extreme hesitancy in the face of potential abuses by monopoly firms. We must change course and take a new tack.
[...]
While the Department is not proposing any one specific test to govern all Section 2 matters at this time, I believe the balanced analyses reflected in the leading cases interpreting the reaches of the Sherman Act provide important guidance in this regard. In particular, leading Section 2 cases – from Lorain Journal v. United States to Aspen Skiing Co. v. Aspen Highlands Skiing Corp. to United States v. Microsoft – highlight a common concern regarding the harmful effects of a monopolist's exclusionary or predatory conduct on competition and, ultimately, consumers. Reinvigorated Section 2 enforcement will thus require the Division to go 'back to the basics' and evaluate single-firm conduct against these tried and true standards that set forth clear limitations on how monopoly firms are permitted to behave. There can be no better charter for our return to fundamental principles of antitrust enforcement. "
--
NE: As notas de rodapé foram suprimidas. A íntegra está disponível aqui, ó.
[...]
I have considered the Government's response to the market conditions that followed the Great Depression, and I believe there are important lessons we can learn from that era [...] Competition was relegated to the sidelines, as the welfare of firms took priority over the welfare of consumers.
[...]
The lessons learned from this historical example are twofold. First, there is no adequate substitute for a competitive market, particularly during times of economic distress. Second, vigorous antitrust enforcement must play a significant role in the Government's response to economic crises to ensure that markets remain competitive.
[...]
Actions Ahead: Enforcement Priorities
[...]
In September 2008, after review and analysis of the extensive hearing record, the Department of Justice issued its report, entitled 'Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act.' The Section 2 Report reflects a significant effort by my predecessors and the FTC in collecting and evaluating the opinions and expertise of antitrust enforcement officials from the United States and abroad, leading economists and legal scholars, antitrust practitioners, and representatives of the business community. To its credit, the Report provides a comprehensive evaluation of the history of single-firm enforcement and careful consideration of the risks and benefits of particular enforcement strategies. The Report's ultimate conclusions, however, miss the mark. In my view, the greatest weakness of the Section 2 Report is that it raises many hurdles to Government antitrust enforcement.
At the core of the Section 2 Report are several critiques of 1960s antitrust enforcement policy, which, taken to their extremes, counsel in favor of a significant limitation of Section 2 enforcement. The Report sounds a call of great skepticism regarding the ability of antitrust enforcers – as well as antitrust courts – to distinguish between anticompetitive acts and lawful conduct, and raises the related concern that the failure to make proper distinctions may lead to 'over-deterrence' with regard to potentially procompetitive conduct. I do not share these concerns. I strongly believe that antitrust enforcers are able to separate the wheat from the chaff in identifying exclusionary and predatory acts. As Judge Posner explained, 'antitrust doctrine is supple enough to take in stride the competitive issues presented by the new economy.'
The Section 2 Report also characterizes a dominant firm's ability to act efficiently as a core concern in evaluating any possible anticompetitive impact of its conduct. There is no dispute that the evaluation of potential economic efficiencies is an important aspect of the analysis of firm conduct. The Report, however, goes too far in evaluating the importance of preserving possible efficiencies and understates the importance of redressing exclusionary and predatory acts that result in harm to competition, distort markets, and increase barriers to entry. The ultimate result is that consumers are harmed through higher prices, reduced product variety, and slower innovation. Accordingly, I believe the Section 2 Report loses sight of an ultimate goal of antitrust laws – the protection of consumer welfare.
With its twin bases for skepticism, the Report counsels in favor of the exercise of extreme caution in enforcing Section 2 and calls for the adoption of a number of safe harbors for certain conduct within its reach. While there is no question that Section 2 cases present unique challenges (for example, in the fashioning of injunctive remedies), the Report advocates extreme hesitancy in the face of potential abuses by monopoly firms. We must change course and take a new tack.
[...]
While the Department is not proposing any one specific test to govern all Section 2 matters at this time, I believe the balanced analyses reflected in the leading cases interpreting the reaches of the Sherman Act provide important guidance in this regard. In particular, leading Section 2 cases – from Lorain Journal v. United States to Aspen Skiing Co. v. Aspen Highlands Skiing Corp. to United States v. Microsoft – highlight a common concern regarding the harmful effects of a monopolist's exclusionary or predatory conduct on competition and, ultimately, consumers. Reinvigorated Section 2 enforcement will thus require the Division to go 'back to the basics' and evaluate single-firm conduct against these tried and true standards that set forth clear limitations on how monopoly firms are permitted to behave. There can be no better charter for our return to fundamental principles of antitrust enforcement. "
--
NE: As notas de rodapé foram suprimidas. A íntegra está disponível aqui, ó.
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