Juris 2020
Depending on whom one talks to, there is a feeling out there that antitrust—in the United States and certainly in the EU and elsewhere—stands on the precipice of a major shift in philosophy, policy, and enforcement. In the view of many, the consumer-welfare standard has not served the interests of consumers—or innovation, generally—but instead has helped marshal in a new age of entrenched tech monopolies, mega mergers, industry consolidations, and enormous wealth disparity. The call, reflected in the recent House Report on digital markets, is to return U.S. antitrust law to its original (or early) purposes and enforcement practices. And, pre-election, legislation in these directions seemed well on its way.
Yet, in these highly partisan and passionate times (yes, even in the antitrust world), it is useful to have an historical perspective into where we have been in U.S. antitrust, what the transitional drivers were in decades past, and, most important, whether those drivers can help us understand what needs to be discussed today to find the path forward.
Barry Hawk, founder of the Fordham Competition Law Institute and renowned antitrust thinker and historian, has provided us with just such a perspective. In this book, Professor Hawk does not merely touch upon the phases of U.S. antitrust law since 1890; rather, he takes us on an epic competition law journey from the earliest days of civilization. He compares “competition”-related laws and regulations from different cultures around the globe, and digs into the political, cultural, and economic drivers of these ancient and otherwise mysterious “laws” and regulations. As far as I am aware, Mr. Hawk’s book is the first of its kind to take both a global and deeply historical (i.e., pre-modern) comparative look at competition systems and laws.
The early history is, likely, the most unfamiliar to readers. Whether describing the social unrest and legal environment in 4th-century B.C. Athens, or medieval and early modern England and France, he shows that the early centuries of competition “law” were less about supply and demand than preventing revolution over “unjust” prices. Likewise, the era of Rome (and medieval institutions later) brought increased organization to the rules and regulation of supply—grain and bread, as usual, being the main concern—but, here, the issues were more about manipulation or “forestalling” than about the competitiveness of markets. Moreover, in those times, there was little concern over “power” in government or private entities; that was simply expected. Hawk’s account of these early centuries is fascinating for history and antitrust aficionados. The chapters on the pre-modern world also give us a new perspective on the development of English common law as well as the driving forces behind the Sherman Act in 1890.
Most of us are familiar with the history since 1890, especially the past 50 years. But this era is well worth retracing with Professor Hawk’s unique perspective. In readable prose, Hawk explains the shift in culture, economic forces, and political willpower that, in the United States, led to the frontal attack on concentration of economic power, whether obtained through unilateral conduct or from conspiracies and acquisitions. He describes the motivations behind the Clayton Act to address mergers and the Robinson-Patman Act (to protect small business), and he shows that, up through the mid-1970s, the United States was concerned more with the perceived evils of concentration—even the prospects of it—than the efficiency of markets or measurable benefits to consumers.
Professor Hawk then explains how new economic theories and tools, together with the increased use of expert academics and testimony, fueled courts’ adoption of the modern consumer-welfare standard across antitrust subject areas. He provides an excellent primer on how that standard has survived and thrived in recent decades, notwithstanding the counter-revolution of so-called post-Chicago economics and theories of “raising rivals’ costs” and market foreclosure. And he explains how, at the end of the day, the consumer welfare (at least for current American antitrust) remains the overarching principle that guides U.S. case law (and, given the composition of the Supreme Court, likely will do so for a long time).
Most interestingly, these historical chapters are a reminder of the pre-modern importance of the basic staples of living—i.e., bread––and how concepts of competition are intertwined with powerful cultural and political forces throughout history. While I am not pre-judging whether the U.S. Department of Justice’s current Google case is sufficiently like Microsoft to warrant judicial action, in reading Professor Hawk’s book I couldn’t help but compare our modern consumers with those of earlier centuries who simply wished to feed their families. His account—which brings life to the fundamental needs of some consumers merely to stay alive—brings needed perspective to today’s fights over whether it is asking too much of a consumer to have to load an additional app if she wants multi-homing on her mobile device, on which is found access to almost all information and products the world has to offer.
Finally, Professor Hawk—one of the pioneers of international antitrust thought and policy—puts the global antitrust world in perspective with his incorporation of the development of EU competition law. While late to the stage—and with a long history of government-sponsored cartels and monopolies—the EU took some decades trying to develop a “single market” that would be “open” to all on a non-discriminatory basis. Professor Hawk explains how, in the EU, economics came into play in the early 2000s, but with a much greater emphasis on “leveling the playing field” or making markets more competitively structured—i.e., “contestable,” as Executive Vice President Margrethe Vestager is fond of explaining. Hence, we see from Professor Hawk that while the EU and U.S. have converged quite a bit on areas such as cartel and merger enforcement, they diverge in how they deal with the digital economy and large tech giants. All of this brings a critical perspective that one cannot obtain by reading the latest advocacy piece or court decision.
Yet Professor Hawk does not advocate an agenda as is tempting to do amidst the noise of today’s antitrust debate, particularly on the topic of whether the consumer-welfare standard should remain the overarching principle that drives judicial application of U.S. antitrust law. Not that he avoids the topic. Rather, he does an excellent job of tracing how the antitrust laws, reflected in Supreme Court decisions, transitioned through early populist phases, and eventually to a consumer welfare standard in the late 1970s and thereafter—all while providing interesting historical and cultural perspectives that likely influenced the development of law and enforcement policy. He also provides an informative review of the current tug-of-war among schools of economic thought, particularly as reflected in major U.S. Supreme Court opinions. But Professor Hawk’s book is neither a case compendium nor advocacy piece; what he provides is perspective, not polemics.
Both antitrust scholars and practitioners alike would do well to have a copy of Barry Hawk’s book on their shelf, and for those of us who are also antitrust history buffs, Professor Hawk has done us all a great service.
