The Future of Antitrust Law


In the future, I would like to see a couple of things happen. One, in price fixing cases, this indirect purchaser rule where the cases are brought into state court and then direct purchasers can sue in federal court I would like to see someone rationalize that kind of litigation, because it really does put defendants in a situation where there are too many things to coordinate and too much risk, and cases are not decided on the merits (i.e., did the client engage in illegal conduct or not?). They are often decided on how much of a nuisance and how much risk a plaintiff can create, given the inability of courts and juries to deal with the complicated issues involved in antitrust cases. So I would like to see something done to get the government enforcement agencies to pursue collusion claims on behalf of direct and indirect purchasers and worry about how it is allocated between the two of them later. At the present, there is no allocation. Such a change can only be achieved if Congress steps in and revises the whole regime of private remedies.

A related development I anticipate is a change to the law awarding treble damages to a civil antitrust plaintiff. Originally, a private plaintiff could get three-fold its actual damages for injuries caused by a violation. The theory of awarding treble damages was to encourage private plaintiffs to supplement the governments antitrust enforcement efforts by bringing cases which the government did not pursue. But that theory generally has not held. Private plaintiffs generally file suit only where the government has pursued a case. It makes no sense to reward the private plaintiff who sits back and lets the government develop the antitrust case. At a minimum, Congress should amend the treble damages provisions so that a private plaintiffs damages are trebled in cases where the government has not investigated the defendants conduct that is the source of the private plaintiffs injuries. It would be wise for Congress to make this change before some court holds that the antitrust regime is unconstitutional. Currently, we have a system where for a single antitrust violation, the government can obtain a criminal fine of up to double the damages caused by the violation; purchasers who have bought directly from the violator can treble damages, and indirect purchasers can get treble damages under state antitrust laws usually for the very same overcharges on which the governments fines and the direct purchasers damages are based. In other words, a defendant is punished for his antitrust violation by being required to pay eight times the actual damages it inflicted. In the context of punitive damages, the Supreme Court has said that requiring a defendant to pay eight-fold the actual damages caused would be unconstitutional. At some point, a court will decide the scheme of antitrust remedies is also unconstitutional.

In the merger area, I see a movement toward trying to rationalize all the various antitrust regimes that exist around the world. At present, a large international acquisition is a logistics nightmare, requiring premerger notification filings in sometimes dozens of jurisdictions, each with a different substantive standard for assessing the lawfulness of the merger. In the United States, the basic inquiry on a merger is whether the merger is going to make consumers better off or worse off. That is true in some other jurisdictions around the world, although they may differ in how they analyze a merger to determine whether consumers are better off or worse off. The European Union, in addition, has a slightly different standard; they do look to see if consumers are better off or worse off, but they also worry about it impacting trade within the common market, which is a different standard. And then there are some countries whose antitrust regime is basically we dont want any mergers that are going to result in closing of plants and loss of employment in our country. The need to make numerous premerger notification filings and to justify a single acquisition under different standards for legality makes it very costly and I have seen situations where the cost of notifying and justifying a proposed merger is so large that it makes it uneconomic for clients to pursue mergers that would actually benefit consumers if they could go forward. I think the antitrust enforcement agencies are starting to realize that the existence of multiple filing requirements and multiple merger enforcement standards is hurting the very consumers that the agencies are meant to protect. As a result, the antitrust enforcement authorities in the U.S. and the European Union have at least explored ways in which to make this process a little bit saner by working to develop a single merger notification system. That is not yet a reality but it will be soon. There has also been a movement among antitrust and competition lawyers worldwide to get what is referred to as convergence to get all the antitrust merger regimes to converge and use the same standard. It has been a positive global development. There is some talk of trying to get antitrust regimes to converge generally not just with regard to mergers but with regard to all conduct. Given issues of sovereignty for each nation, I do not see that happening. I think it is a utopian dream of some of my colleagues.

In the future I think it is possible that specialized courts will be established to deal with antitrust matters. Antitrust, as I have said, depends heavily on economic theory and economic analysis, and that analysis and theory is becoming much more sophisticated. It is very difficult for judges who have five hundred cases on the docket and only one or two of them are an antitrust case, to take the time to specialize in economic theory and antitrust law and as a result, many bad decisions issue. I would like to see Congress pass a law to authorize specialized antitrust courts, so that we can have judges who are able to devote the time to learning the economic theory, or at least specialize because they have enough cases that it makes it worthwhile for them to specialize in antitrust. Right now the laws are so diverse and often complicated we ask many of our judges to master an incredibly diverse number of special legal areas, and sometimes they are not always able to do that. Because antitrust policy often derives from antitrust case law and because the decision of an antitrust case can affect an incredible number of interests not represented by the parties in the antitrust case itself, there is good reason for Congress to take steps to insure that antitrust cases are correctly and intelligently decided.

James R. Eiszner chairs Shook, Hardy & Bacons Antitrust and Trade Regulation Practice Group and co-chairs the firms White Collar Practice. Mr. Eiszner is a graduate of Princeton University and New York University School of Law, where he was also Articles Editor for the Review of Law and Social Change. Before joining the firm, Mr. Eiszner practiced antitrust in New York for twenty years where he was a member of the Antitrust and Trade Regulation Committee of the Association of the Bar of New York City.

Mr. Eiszner is a trial lawyer who has tried both civil and criminal antitrust cases to successful verdicts. He also has successfully tried administrative proceedings before the Federal Trade Commission and has a successful track record in defending preliminary and permanent injunction cases brought by the federal antitrust enforcement agencies, by state attorneys general and by private parties seeking to prevent consummation of mergers. He also regularly consults with clients who seek counseling on antitrust matters.

Mr. Eiszner advises clients on all facets of the antitrust laws, including pricing and distribution issues, mergers and joint ventures (including premerger notifications), patent licensing, standard setting, trade association activities, consent decree compliance and antitrust exemptions. He has designed antitrust compliance programs and participates frequently on antitrust and compliance presentations to business people. He has been retained by various investment houses to advise traders on the likely outcome of antitrust challenges to proposed mergers.




Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
Inside the Minds Stuff - Inside the Minds. Winning Antitrust Strategies
ISBN: N/A
EAN: N/A
Year: 2004
Pages: 102

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