November 5, 2023
Antitrust law exists, at least in modern times, to protect the competitive process and prevent firms from creating or exercising market power to the detriment of customers or consumers. The foundation of federal antitrust law consists of three very broadly worded statutes whose substantive provisions can be printed on a page and a half. The first of these statutes, the Sherman Act, was enacted in 1890, and the other two, the Clayton Act and the Federal Trade Commission Act, were enacted in 1914. Surprisingly, Congress has intervened only rarely in antitrust law, so for the most part the statutes today contain the operative provisions that they did when they were originally enacted. What has changed, sometimes dramatically, is how the courts interpret what the statutes prohibit. Indeed, the best way to think about the antitrust statutes is that they are enabling acts to permit the courts to pursue a “common law” approach to developing rules to protect competition.
The full four-credit survey course consists of four parts—price fixing, mergers, dominant firm behavior, and distribution—and the attention we will devote to each is a function of its significance in modern U.S. antitrust practice (roughly 6:4:3:1 ). I last taught this course at Yale Law School in 2014, so some of the materials may be dated.
The first part of the course will deal with price-fixing arrangements and other competitor collaborations, including criminal, government civil, and private enforcement actions. This is by far the most significant part of antitrust practice today. It has criminal as well as civil aspects. Individuals who engage in price-fixing can go to jail and companies can pay billions of dollars (no kidding) in criminal fines and treble damages.
The second part of the course will address mergers and acquisitions. For reasons we will explore, there is very little merger antitrust litigation on the merits. Instead, modern antitrust merger control has become more like administrative agency regulation, with in-depth investigations of potentially problematic transactions and consent decree settlements to “fix” any perceived antitrust problems, all unsupervised by any court. We will explore this process and consider how the design of the process drives settlement outcomes and influences contract negotiations between the merging parties. That said, there is some merger antitrust litigation, and we will examine some of those cases and the procedural contexts in which they arise. The third part of the course will address dominant firm behavior. Unlike price fixing, other horizontal arrangements, and mergers and acquisitions, all of which involve multiple parties, this area of antitrust addresses the conduct of firms acting unilaterally. For reasons we will explore, the U.S. law is relatively permissive toward what single firms can do, unlike the European Union, which is much more interventionist.
Finally, we will examine restrictions a firm can place on firms in its distribution system. In the case of a manufacturer, for example, these restrictions might include whether its distributors/retailers can deal in the products of competing manufacturers (exclusivity restraints); whether the manufacturer can sell its products at different prices to its different customers (price discrimination); where, to whom, and at what price they can sell the manufacturer’s products (nonprice and price vertical restraints); whether the manufacturer can require its customers to purchase other products in order to purchase the product they really want (tying arrangements); and the freedom the manufacturer has in discounting bundles of different products (mixed bundling).
Each section examines antitrust law from three perspectives: historical, substantive, and process.
Given its common law nature, an historical perspective is essential in understanding how today’s modern rules were created and how they might change in the future. To this end, the course explores how the major rules of antitrust law have evolved over time. In the process, we will touch upon most of the seminal historical cases in antitrust law.
The substantive perspective looks at what antitrust law is trying to accomplish, both positively and normatively. The goals of U.S. antitrust law, that is, he policy objectives, as interpreted by the courts, have changed dramatically over time. Today, the goals of antitrust law appear to be the promotion of economic efficiency and consumer welfare, and the course examines how well the antitrust rules today further these goals. Economics will play a major role in this examination. Economics provides tools useful in predicting how firms and markets are likely to respond to a given antitrust rule and hence to evaluate how well the rule is likely to do measured against the goals of antitrust, whatever they may be. At the same time, the economic tools are by no means perfect (and sometimes almost worthless) in predicting firm behavior and market outcomes, which leads to a lively debate over what tools to use, how to use them, and what to do when the tools are recognized as giving unreliable predictions.
Finally, questions of whether some business arrangement or conduct violates the antitrust laws, and what to do about it if it does, are resolved through a process. The process may involve a criminal investigation by the Antitrust Division of the Department of Justice and a subsequent plea agreement or criminal prosecution, a merger investigation by the Antitrust Division or the Federal Trade Commission and a subsequent consent decree settlement or merger litigation in federal court or in an FTC administrative proceeding, or a private litigation (perhaps a class action) for treble damages and injunctive relief in federal court. Some of the most far-reaching developments in modern antitrust law have been changes in the process, including in the rules governing prudential standing, motions to dismiss, summary judgment, class certification, and the admission of expert testimony and we will touch upon these in the course.
This four-credit course explores the process of raising, defending against, and ultimately resolving, antitrust problems that arise in mergers and acquisitions in the U.S. system. Unlike the usual law school class, which is organized around doctrinal elements of the law and uses case excerpts to illustrate these elements, we will organize the course around case studies. These case studies will range from simple negotiated acquisitions to hard-fought contested takeovers. Some of the case studies we will examine include such recent high-profile transactions as Hertz/Avis Budget/Dollar Thrifty, H&R Block/TaxACT, Walgreens/Rite-Aid, Disney/Fox, Sysco/U.S. Foods, Staples/Office Depot, Anthem/Cigna, Halliburton/Baker Hughes, Comcast/NBCUniversal, Anheuser-Busch InBev/Grupo Modelo, Sirius/XM, Nielsen/Arbitron, and AT&T/Time Warner.
In each case study, we will examine the antitrust problems presented by the transaction. Depending on the case study, these will include predicting antitrust problems and identifying possible defenses and solutions at the earliest stages of a deal when information is scare, performing detailed analyses when information if more available, organizing the defense the transaction, navigating the DOJ/FTC merger review process, anticipating and structuring consent decree settlements, litigating merger antitrust cases, and negotiating provisions in merger agreements to allocate antitrust risk between the merging parties. Antitrust, as with economic regulation generally, is as much about process as it is about the substance, so we will spend a meaningful amount of time on the process of merger antitrust reviews, consent settlements, and litigation.
The two/three-credit procedure course, which I taught at NYU School of Law from 2010 through 2019 and at Georgetown since 2017, focuses on how challenges to price fixing and horizontal mergers are raised, pursued, and resolved. This allows for good treatment of the strategies and tools in the criminal, civil, and administrative sides of antitrust law. What is missing, of course, is the application in other areas of antitrust law. In the context of contemporary case studies, we will discuss criminal indictments, plea agreements and the DOJ's leniency policy, sufficiency of pleading, presumptions and burdens of proof, rules of evidence (including the use of expert evidence), dispositive pretrial motions, class actions and class action settlement strategies, temporary restraining orders and preliminary injunctions, laches and the statute of limitations, treble damage judgments, interlocutory and final appeals, and Supreme Court review. There is no exam, but a paper will be required. I am developing a page with some suggestions for paper topics that should give you a feel for what I have in mind. While you may develop one of them into a paper, you are entirely free—indeed, encouraged—to explore a topic on your own that interests you. You can write on anything provided that (1) the paper addresses a procedural antitrust question or a substantive antitrust question in a procedural context, and (2) we agree on the specific question(s) the paper will address.
Everything you need for any of the courses is on this web site. There is no required text and indeed nothing for you to buy. A pdf of the required reading is at the top of each unit page. Although we have a lot to cover, the required reading will not take longer than two hours for every hour of class. If you hit four hours for a two-credit class and still have more to read, feel free to stop reading. I will send around an email every week that prioritizes the reading. If you pay attention to the prioritization and run out of time to finish the reading, you will be fine. Anything that is really important in the lower priority reading I will cover in class. The materials for the most part are presented in full text and everything in them is fair game for discussion in class. The materials were chosen variously for their currency, fact patterns, treatment of precedent, procedural posture, evidentiary questions, and, occasionally, the errors they contain. Unlike the typical antitrust course, the principal cases are not chosen for their precedential significance. While some of these cases will become major precedents, many will not.
Read the materials once with some care but do not obsess over them. For the most part, the readings will consist of court documents, such as complaints, motions, briefs, interlocutory orders, trial court decisions, and appeals decisions. These materials are not boiled down to their essence, where everything is important (as you would find in a casebook), and there is no need to know everything in them. Of course, the more you know from the reading, the more you will get from the course. The materials in this course are not necessarily works of art and you undoubtedly will find some of them lacking, but what we will be reading are the actual documents that appeared in the case. I encourage you to be critical of the materials. I have found that I learn the most from what I believe are mistakes or missed opportunities, and asking how I would have done it differently.
In order to cut down on the required reading and enable you to participate more in the class discussions, I have prepared "class notes" for each of the units. These notes, which are in the form of PowerPoint presentations, capture all of the salient points that we will cover. This is much better than having you concentrate on writing down everything and thinking about it later (if you get to it at all). The class notes are available on this web site along with the required and supplemental reading materials. I encourage you to bring the “deck” (as it is known in the trade) to class so that you can annotate it.
Bottom line: It will be important to read both the required reading and the class notes.
There will be about two hours of reading for each hour of class. You will get the most out of class if you are generally familiar with the required reading (i.e., read it once with some care but do not obsess over it—this is a critical skill for an attorney, regardless of the area of practice).
The site includes a list of basic reference materials in antitrust law, economics, and policy, including some readings on the design of antitrust regimes and the history of antitrust law. I am building a topical index and a case studies index, but both remain very much works in progress.
Needless to say, inclusion of secondary materials on this site does not constitute an endorsement of their content, but rather should be taken only as representing a point of view that is worthy of attention in today's antitrust environment.
Fun deck: ChatGPT Explains Antitrust Law (Jan. 26, 2023)
NB: "±" indicates that the hyperlink will take you to another site.
|1||Introduction to Price Fixing: Legal and Economic Foundations|
|3||Criminal Price-Fixing Investigations and Prosecutions|
|4||The Private Cause of Action|
|5||Antitrust Class Actions|
|8||Horizontal Market Divisions, Group Boycotts, and Other Horizontal Arrangements|
Mergers and Acquisitions
|9||Introduction to Mergers: Statutes and Merger Guidelines|
|13||DOJ/FTC Merger Review and Settlement Procedures|
|15||Contractual Merger Risk Allocation|
Unilateral Dominant Firm Behavior
|16||Introduction to Unilateral Conduct Offenses|
|18||Unilateral Refusals to Deal|
|19||The IP/Antitrust Interface|
Restraints on Distribution
|20||Exclusivity Arrangements/Group Boycotts|
|21||Non-Price Vertical Restraints|
|22||Tying Arrangements, Mixed Bundling, and Loyalty Discounts|
|23||Resale Price Maintenance|