Antitrust law is back in vogue. After years in the wilderness, antitrust enforcement has reemerged as a hot topic in Washington and in the legal academy. In one heady week in May of 2009, a front-page story in the New York Times reported the dramatic decision of Christine Varney--the Obama administration's new Antitrust Division head--to jettison the entire report on monopolization offenses released by the Bush Justice Department just eight months earlier. In a speech before the Center for American Progress, Varney announced that the Justice Department is "committed to aggressively pursuing enforcement of Section 2 of the Sherman Act." As if to prove that "shock and awe" enforcement against monopolists is still possible, two days later the European Commission released its decision fining Intel nearly $1.5 billion for beating up on AMD in the microprocessor market. Suddenly, the antitrust community felt an electric current that it had not felt in years.
At least five related forces are contributing to this apparent resurgence of antitrust sentiment. First, the conventional view is that U.S. antitrust law has largely been in the grips of a laissez faire "Chicago school" perspective for the last quarter century. If history is a reliable teacher, antitrust enforcement is cyclical--enforcement comes and goes. The Chicago school may simply have run its cycle and the time inevitably come for a more interventionist antitrust regime.
Second, much of the antitrust scholarship in the academy over the last decade has taken a post-Chicago tilt, calling into question Chicago's anti-interventionist assumptions. A recent collection of essays written by prominent economists and law professors and edited by Bob Pitofsky, Bill Clinton's Federal Trade Commission chair, announces that the Chicago school "overshot the mark" and steered antitrust law in a "profoundly wrong direction." (See "The Trustbusters' Revival Misfires," p. 50.) Academic sentiment tends to foreshadow enforcement trends and judicial sentiment. The Chicago critique of the preexisting regime began in the 1950s, several decades before Chicago became dominant in the courts and antitrust agencies. So it is natural that the increasing barrage of post-Chicago literature in the academy is beginning to bear fruit in the real world of antitrust enforcement.
Third, for the first time in many years, a president has actually shown some interest in antitrust enforcement. On the campaign trail, then-Senator Obama actually gave speeches dedicated to antitrust. He announced that he would appoint "an antitrust division in the Justice Department that actually believes in antitrust law" and pledged increased enforcement in the pharmaceutical, media, energy, and insurance sectors. President Obama's choices of Jon Leibowitz for chair of the FTC and Varney to head the Antitrust Division give a nod to significantly enhanced enforcement. In addition to repealing the monopolization report, the agencies are reportedly investigating complaints by Verizon and AT&T that major cable operators like Cablevision and Comcast refuse to sell them Cablevision- or Comcast-produced sports shows, contemplating an enforcement action against Google over its deal to make more books available online exclusively with Google, and calling for reinvigorated enforcement against branded pharmaceutical companies that supposedly pay off generics makers to not bring competing drugs to market.
Fourth, the economic crisis has dealt a sharp blow to laissez faire ideology and reinvigorated political support for regulatory solutions. When prominent free marketeers like Alan Greenspan and Richard Posner publicly blame the crisis on insufficient regulation, the laissez faire ideological commitments that undergird the Chicago School are obviously in considerable danger. Varney has gone so far as to suggest that the economic crisis is partly attributable to lax antitrust enforcement.
Finally, antitrust enforcement is growing exponentially around the world. …