Vol. 14 No. 1 (January 2004)

COMPETITION LAW, by Rosa Greaves (Editor). Burlington, VT: Dartmouth Publishing Company, 2003. 627 pp. Cloth $245.00. ISBN: 0-7546-2117-0.

Reviewed by David Schultz, Graduate School of Public Administration and Management, Hamline University. Email: dschultz@hamline.edu.

New issues challenge antitrust law and competition policy in the first decade of the twenty-first century. Unlike the days when antitrust policy and competition law sought to prevent monopolization through restraints on vertical and horizontal price agreements, product tie-ins, and mergers among competitors in the same market, competition policy now has gone global.

Recent events in the news recount mega bank mergers and the increased consolidation of media giants along with take-over of the various telecoms by one another and by technology giants seeking to leverage the latest efficiencies. Moreover, the specter of monopoly constantly haunts Microsoft, both in the United States and around the world, and the European Union battles with the United States over issues such as steel tariffs or the ban on genetically-modified food. Such conflicts have brought the World Trade Organization (WTO) into the middle of disputes over how best to ensure fair competition and free trade in an increasingly global marketplace. How free trade can be reconciled with nationalism, national security, or the sovereign rights of nation states to promote domestic jobs and prosperity have joined the traditional problems of competition law as issues that must be addressed by governments around the world.

Rosa Greaves' COMPETITION LAW is a massive reference book on antitrust law and policy. The book is a compilation of 22 of the most important articles on competition law and policy in the last 30 years. The book is part of Ashgates's (Dartmouth Publishing in the United States) International Library of Essays in Law and Legal Theory series. All of these books collect the major articles within a particular field and reproduce them in one reference volume. The result is a highly useful but very pricey and hefty volume that is generally of interest only to specialists in the field and affordable only by a few reference libraries. Yet for those interested, the volumes provide a wonderful overview of the current scholarship in a particular subject. COMPETITION LAW is no exception to that rule, delivering a range of articles that are stimulating and revealing about the state of antitrust law and policy in the United States (U.S.) and the European Union (EU) today.

What do we learn about competition policy from reading this volume? Several themes emerge. First, several of the articles provide outstanding overviews of the history of U.S. antitrust policy. Barry Hawk, as well as other authors, point out that American anti-trust policy is structured around four laws: The Sherman Anti-Trust Act of 1890; the Federal Trade Commission Act of 1914; the Clayton Act of 1914; and the Collier-Kefauver Act of 1950. A fifth law, the Robinson-Patman Act of 1936 is aimed at preventing price discrimination against small businesses, but this law is generally and unfortunately often overlooked, including in this volume. Each of the laws addresses aspects of competition policy differently, often coming to contrasting policy approaches. Thus, for example, section two of the Sherman Act makes it illegal to construct contracts or form combinations or conspiracies to restrain trade or commerce; whereas section four the Clayton Act appears more comprehensive and inclusive, declaring a broader host of activities to be illegal if their purpose is to lessen competition or create a monopoly. While one law makes monopolization illegal, another seems to make all monopolies to be against the law. Reconciling the contrasting meanings of these Acts forms one part of the book.

Articles by Frank Easterbook, Richard Posner, and Rudolph Peritz examine the rule of reason and the Supreme Court's retreat from per se violations. Early on, they note, the Supreme Court ruled in STANDARD OIL (1911), that the Sherman Act could not have meant what it said in prohibiting all monopolies. Instead, the Court adopted the rule of reason that declared that not all combinations are illegal; only those leading to an abuse of position or hurting competition would be deemed violations. Second, while at one time the Court had fashioned several rules that were considered per se violations of the law-e.g., price-fixing-in many areas the Court in the last 30 years has retreated from the per se approach, preferring to adopt various guises of the rule of reason to examine specific behavior. Explaining why the Court did that is the second theme that emerges in this volume.

Robert Bork and the Chicago School of Economics have had a profound impact upon American antitrust policy. Bork's ANTITRUST PARADOX is perhaps the most influential book on competition policy in the last 30 years, arguing that the central goal of the Sherman Act and antitrust law in particular is the promotion of consumer welfare, better known as efficiency. Thus, contrary to Robinson-Patman, Bork contends that protecting small businesses is not a goal of antitrust policy, and some forms of anticompetitive behavior may in fact be consistent with competition law! While there are no Bork writings in this book, Bork is certainly discussed extensively, noting both his redefinition of the goals of antitrust law and his law office claims that the history of the Sherman Act reveals no political goals beyond the efficiency and consumer welfare provisions.

Several of the articles, including one by Robert Pitofsky from 1979 and a Louis Schwartz 1979 essay, sharply criticize Bork's law office history. They demonstrate that the Sherman Act grew out of significant concern regarding the rise of large trusts and combinations, and that there were clear political goals that Congress had in mind, only to be eviscerated by the rule of reason in STANDARD OIL, and subsequently by Bork and the Chicago School. While Bork and colleagues may have gotten their history wrong, they have nonetheless won the ideological war. Indeed, the Supreme Court since the early 1970s has increasingly taken more of a purely economic and efficiency-based approach to antitrust law. Thus, combinations of larger banks and other competitors are not illegal unless they produce inefficiencies that hurt consumers. Such a logic, of course, leads to few practices that Bork would oppose-except for the Microsoft case, when he was paid to work on the other side of the antitrust claims against the software giant.

The shift in U.S. antitrust policy towards the law and economic approach leads to a third theme in the book-the increasing gulf and divergence in competition policy between America and the EU. Sonya Willimsky's opening essay in COMPETITION POLICY states that the distance between the revisionist Chicago School and traditional Harvard approaches to antitrust law pale in comparison to the distance between Chicago and Brussels. While U.S. competition law is now mostly economic, EU law, growing out of Articles 85 and 86, have very explicit political and economic goals. EU law is meant to break down domestic barriers and create a uniform and comprehensive internal market. Thus, EU competition law, as detailed in several good chapters by Willimsky, Alex Jacquemin, and others, has developed a focus that places different burdens upon members, leading to the enforcement of specific political goals that are at odds with the preferences of U.S. regulators. For businesses and individuals doing business in both the U.S. and the EU, they now face contrasting regulatory regimes, and these two regimes are destined to compete for hegemonic supremacy in the world antitrust enforcement economy.

A final theme thus emerging in this volume is competition law in a world economy. Ignacio DeLe—n and Spencer Waller specifically address the role of the WTO on this subject. They note how global competition law and free trade are threatening state sovereignty and the capacity of the nation state to protect its borders and its people. DeLe—n does a particularly good job in demonstrating how the classical goals of antitrust law may be at odds with the new goals of a global policy, necessitating reconsideration of what is to be expected from competition law in the twenty-first century.

For those interested in the subject, COMPETITION LAW is an excellent reference. It offers great contrasts on competition law, especially for those seeking to understand current Supreme Court or European Court of Justice rulings. Yet, were there any introductory essay by the editor that had summarized the main themes of the book, such an inclusion would have been a welcome addition. Although quite valuable and useful, few, except for reviewers, will read the book from cover to cover.

REFERENCE:

Bork, Robert H. 1997. THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF. New York: Simon & Schuster.

CASE REFERENCE:

STANDARD OIL CO. v. UNITED STATES, 221 U.S. 1 (1911).

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Copyright 2004 by the author, David Schultz.