Optimizing Private Antitrust Enforcement

By Crane, Daniel A. | Vanderbilt Law Review, April 2010 | Go to article overview
Save to active project

Optimizing Private Antitrust Enforcement


Crane, Daniel A., Vanderbilt Law Review


Private litigation is the predominant means of antitrust enforcement in the United States. Other jurisdictions around the world are increasingly implementing private enforcement models. Private enforcement is usually justified on either compensation or deterrence grounds. While the choice between these two goals matters, private litigation is not very effective at advancing either one. Compensation fails because the true economic victims of most antitrust violations are usually downstream consumers who are too numerous and remote to locate and compensate. Deterrence is ineffective because the time lag between the planning of the violation and the legal judgment day is usually so long that the corporate managers responsible for the planning have left their corporate employer before the employer internalizes the cost of the violation. Private litigation needs to be reconceptualized entirely and redirected toward a forward-looking, problem-solving approach to market power issues.

INTRODUCTION

The United States is unique in the world insofar as private enforcement of the antitrust laws vastly outstrips public enforcement. There are roughly ten private federal cases for every case brought by the Department of Justice or Federal Trade Commission.1 Almost all of these private cases are oriented exclusively toward damages. While the plaintiff usually asks for an injunction against further misconduct, everyone understands that the case is all about the treble damages or, more likely, the settlements that the defendants inevitably pay if the case survives summary judgment.2

Although most other countries follow a model that relies primarily on governmental antitrust enforcement, in many jurisdictions there is a surge of interest in expanding private rights of action for damages.3 Most prominently, the European Commission released a White Paper in 2008 - essentially a blueprint for further action by the Commission - calling for expanded private antitrust enforcement within the European Union.4 Notably, while proclaiming the need for expanded private enforcement, the White Paper seems to recoil in horror at the possibility of following a U.S. blueprint. On virtually every major aspect of private litigation - including standing, discovery, claim aggregation, and damages - the White Paper argues for an approach that essentially rejects the U.S. position.5

In many other jurisdictions, private enforcement is either well under way or under active discussion.6 As with the European Union, however, most movements toward private enforcement reflect deep ambivalence about the U.S. model.

In this Article, I argue that efforts to correct the perceived infirmities of the U.S. private enforcement system by tweaking the mechanics of enforcement - standing rules, discovery principles, claim aggregation mechanisms, damages rules, and the like - are futile. The shortcomings of private enforcement are existential, not technical. They go to foundational assumptions about the goals and purposes of antitrust law and competition policy. Private antitrust in the United States has rarely advanced the two assumed goals of private enforcement: deterrence and compensation. As other jurisdictions around the world consider adopting a private enforcement model, they should begin by reevaluating the goals of private enforcement. Only once the goals are properly specified does it make any sense to discuss the more technical implementation details.

To critique the U.S. system of private litigation is not to call for a governmental monopoly of antitrust enforcement, the de facto rule in most countries. Those who distrust private economic monopolies should also distrust public governmental monopolies. A system of private enforcement allows for decentralized decisionmaking and individualized bargaining. It supplies a set of "on the street" enforcers closer to the relevant problems, along with enhanced enforcement resources and continued enforcement during downturns in public enforcement.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Optimizing Private Antitrust Enforcement
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?