Barnett on the the Supreme Court, Convergence, and Enforcement Levels

Josh Wright —  4 March 2008

Tom Barnett (DOJ Antitrust AG) gave a speech February 29th to the Federalist Society where he touched upon a number of interesting issues we’ve discussed from time to time here at TOTM.  Some highlights:

  • Barnett on recent Supreme Court activity.  “I submit that the principal reason for the abundance of supermajority decisions is an analytical consensus that has emerged. The Court has accepted the focus on economic efficiency and the use of economic analysis. Many of the recent decisions reflect no more than an application of these principles to outdated antitrust doctrines. As Judge Douglas Ginsburg concluded in a recent article, the “Court, far from indulging in a pro-defendant or anti-antitrust bias, is [instead] methodically re-working antitrust doctrine to bring it into alignment with modern economic understanding.”

I’ve noted elsewhere that the Roberts Court’s antitrust decision can be characterized as an attempt to square outdated antitrust law with modern economic theory, empirical evidence, and a sensitivity to error-cost analysis (which Barnett seems to agree with in noting the “practical considerations” that guide the SCOTUS decisions in Twombly and Weyerhaueser).   Barnett also goes on to discuss the prominent role of stare decisis considerations in Leegin as compared to the Court’s markedly different position in State Oil v. Khan (1997) and hints that the newfound interest may “involve more than merely antitrust issues.”

  • Barnett on Convergence.  “There remain significant differences between U.S. antitrust law and some aspects of other jurisdictions’ competition regimes. The EC, for example, is tasked with promoting a single European market, and therefore prohibits certain territorial contract restrictions that would not violate U.S. antitrust laws if they involved restrictions between U.S. states. More generally, it remains to be seen whether we can forge a consensus on the antitrust rules for judging the activity of individual firms — governed in U.S. law by section 2 of the Sherman Act. Such challenges and differences are important to note but they should not be exaggerated. In general, U.S. and foreign enforcers have made great progress in promoting principled convergence.”

Finally, Barnett chimed in on claims that the level of enforcement activity can be used to infer something about the quality of antitrust enforcement — a topic we’ve devoted some discussion to here at TOTM (see, e.g., here , here and here).  In addition to pointing to the DOJ’s impressive record of increased criminal antitrust enforcement, here’s what Barnett had to say:

  • “Much of the scholarly and legal development in recent decades has focused on ways in which our older antitrust enforcement was overly aggressive. Scholars have opined and agencies and courts have accepted that mergers of grocery stores with no more than 15 percent of the market are unlikely to harm competition. Presumptions of market power were misplaced when based merely on the existence of patents. Vertical restrictions, such as territorial limitations or resale price maintenance, can benefit competition and consumers. Vague rules for single firm conduct can chill beneficial, procompetitive activity. More generally, the limitations of institutions such as courts, and the administrative costs of implementing rules, need to be taken into account in developing antitrust standards.”