Recognizing the Limits of Antitrust: The Roberts Court Versus the Enforcement Agencies
Posted by Social Science Research Network
Recognizing the Limits of Antitrust: The Roberts Court Versus the Enforcement Agencies Thomas A. Lambert (University of Missouri) & Alden F. Abbott (U.S.Federal Trade Commission)
Abstract: As Judge Frank Easterbrook famously explained three decades ago, antitrust is an inherently limited body of law. In crafting and enforcing liability rules to combat market power and encourage competition, courts and regulators may err in two directions: they may wrongly forbid output-enhancing behavior or wrongly fail to condemn output-reducing conduct. The social losses from false convictions and false acquittals, taken together, comprise antitrust’s “error costs.” While it may be possible to reduce error costs by making liability rules more nuanced, added complexity raises the “decision costs” incurred by business planners (ex ante) and adjudicators (ex post). In light of all these costs, Easterbrook advocated an approach that would optimize antitrust’s effectiveness: interpret and enforce the antitrust laws so as to minimize the sum of error and decision costs.
This Article assesses the degree to which the U.S. Supreme Court (under the leadership of Chief Justice John Roberts) and the federal enforcement agencies (the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice) have embraced the optimizing, “limits of antitrust” approach Judge Easterbrook advocated. In its decisions addressing vertical restraints, exclusionary conduct, and antitrust enforcement, the Roberts Court has consistently recognized antitrust’s limits and has adopted rules consistent with an optimizing approach. The enforcement agencies, by contrast, have eschewed a limits of antitrust approach, at least with respect to exclusionary conduct, vertical restraints, intellectual property rights, and merger review.
Featured News
Google and South Carolina Clash Over State Records Demand
May 8, 2024 by
CPI
Telefonica Germany Teams Up with Amazon Web Services to Migrate 5G Customers
May 8, 2024 by
CPI
Federal Judge Grants $7.4 Million Settlement in Pork Price-Fixing Case
May 8, 2024 by
CPI
Wilson Sonsini Bolsters Antitrust and Competition Practice with Key Partner Returns
May 8, 2024 by
CPI
EU to Scrutinize Telecom Italia’s Network Sale to KKR
May 8, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI