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.
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 …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Optimizing Private Antitrust Enforcement. Contributors: Crane, Daniel A. - Author. Journal title: Vanderbilt Law Review. Volume: 63. Issue: 3 Publication date: April 2010. Page number: 673+. © Vanderbilt Law Review Jan 2009. Provided by ProQuest LLC. All Rights Reserved.
This material is protected by copyright and, with the exception of fair use, may not be further copied, distributed or transmitted in any form or by any means.