NCPA - National Center for Policy Analysis

Antitrust Revisionism

March 25, 1999

Legal scholars have noted a decided shift in the federal government's approach to antitrust policy. Instead of prosecuting cases of suspected price fixing and bid rigging, which were areas of concentration in the past, government lawyers are going after companies that have become large and successful by offering better products and higher levels of customer service.

The emphasis has shifted from prosecuting suspected criminal activities to civil investigations. The new theory seems to be that markets can't be trusted to preserve competition without government help.

  • The administration of President Ronald Reagan followed a largely hands-off antitrust policy -- with the result that the number of full-time antitrust employees dropped from over 900 to about 500 in 1989.
  • During the Reagan years, economic theories from the University of Chicago held that antitrust laws were intended to protect consumers -- rather than to help competitors and provide employment for lawyers.
  • But antitrust litigators in the Clinton administration believe that markets aren't self-correcting, and therefore government intervention is needed to ensure competition.
  • Emphasizing civil actions, the number of criminal cases filed by the Justice Department under Clinton has dropped from 84 in fiscal year 1993 to 38 in fiscal 1997.

But the number of civil actions has increased, and the targets have been some of America's most successful corporations, such as: Visa International, MasterCard International, Microsoft Corp., Intel Corp., Staples Inc. and Office Depot, to name a few.

Hillard Sterling, a lawyer with the Chicago firm of Gordon & Glickson who helped defend the merger of Staples and Office Depot, says that if markets are cut too thinly, "a merger could never occur." He states that antitrust law "was never intended to reach that widely."

Sterling believes that "antitrust is sufficiently vague enough to enable creative prosecutions."

Source: Lisa Wirthman, "Antitrust's Odd New Frontiers," Investor's Business Daily, March 25, 1999.

 

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