CORPORATE CRIME REPORTER
Report
Calls for Stepped up Antitrust Enforcement
22 Corporate Crime Reporter 25, June 19, 2008
When a new administration takes office in January 2009, it should ratchet up
antitrust enforcement.
That’s the bottom line recommendation of a draft report released this week by the American Antitrust Institute.
The Institute is holding a two-day conference at the National Press Club this week to discuss the draft report and to commemorate the tenth anniversary of the Institute.
“Since the Chicago School gained ascendancy in antitrust, there has been disproportionate concern about the risks associated with over-enforcement and too little concern about the risk of under-enforcement,” the authors write. “We believe that, as a generalization, today’s government bends over backward to avoid making an intervention that might turn out to be mistaken, at the price of creating a system in which there is too little enforcement.”
“That tilt against enforcement is especially hard to justify since recent mergers have already made markets so much more concentrated, and the risk of anticompetitive outcomes therefore greater. The Chicago School’s quest for complete fairness for defendants has resulted in neglect of the interest of victims and potential victims.”
“The pendulum must now swing back in the direction of increased enforcement,” the report concludes.
The report lays out a “manifesto for competition” which states that “antitrust may well be the single greatest American contribution in the field of political economy.”
“Where there is adequate competition, consumers are offered a satisfying range of choices and can exercise a high degree of control over day-to-life decisions,” the authors write. “Experience in making choices builds a politically competent citizenry. Where there is adequate competition, economic power remains decentralized and is therefore more difficult to translate into centralized political power.”
The draft report has eleven chapters ranging from Department of Justice and Federal Trade Commission – the two key antitrust enforcement agencies – to private enforcement, merger policy and various industry subject areas, including media, energy and agriculture.
Each section is packed with insights and recommendations.
So, for example, on criminal cartel enforcement, the report finds that “the near absence of corporate prosecutions of cartelists at trial over the past 15 years is a major cause of concern.”
“If guilty defendants believe that Antitrust Division threats to bring them to court are empty bluster, its ability to extract meaningful fines through negotiations is severely compromised. The Division should bring at least one or two well-conceived cases targeting large firms to trial each year.”
The report also recommends raising the maximum Sherman Act corporate fines from $100 million to $1 billion and the individual fine from $1 million to $10 million.
On merger policy, the authors call on the new administration to “correct the systematic tendency of the federal enforcement agencies – the Department of Justice and the Federal Trade Commission – to allow mergers that should be stopped, and for the administration to encourage the courts to do so as well.”
“Both
of those tasks can be accomplished by developing, applying and advocating a
series of presumptions clarifying the line where enforcement should generally
occur and the factual showings that merging firms must make in rebuttal.”
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