Wednesday, October 27, 2004 - The Progress & Freedom Foundation Blog

Modernizing Antitrust Gives Easterbrook "the Willies"

The Federalist Society sponsored a panel today on Antitrust Modernization and Public Choice. Judge Easterbrook, former antitrust chief Douglas Melamed and FTC General Counsel William Kovacic generally agreed that the "Antitrust Modernization Commission" shouldn't have much work to do.

Judge Easterbrook noted that "modernization" implies that there is a need to craft special rules for emerging technologies, but that industry-specific rules should be avoided at all costs. Instead, if there's a shortcoming in the antitrust laws, that should be fixed across-the-board. Much of his talk was a refresher of his classic article, The Limits of Antitrust.

Kovacic discussed the interplay between public choice and institutional design, recommending that agencies look at the use of self-limiting principles (such as merger guidelines), efforts to increase transparency (e.g., committing to explain decisions not to prosecute after antitrust investigations are complete), ex post reassessment of completed matters, and heavy investments in both offensive and defensive advocacy. Or, much of what the FTC has been doing.

Melamed warned the Modernization Commission to stay away from addressing questions involving the substance of antitrust law, such as overruling Trinko v. Verizon. He noted that these issues would be: (1) intensely politicized, and (2) better left to the common law process, as our understanding of the underlying economic principles behind antitrust changes over time.

On the whole, as the old saying goes: If it is not broken, then there is no need to repair it.

posted by @ 5:24 PM | Antitrust & Competition Policy