The economic analysis of antitrust consents

Henry G. Manne, our friend, Mentor, and colleague, was a pioneer in the economic analysis of law. By consistently challenging the notion that existing institutions were well understood, he expanded the domain of economics to new and fertile ground. In that spirit, our goal in this article is to bring out of the shadows an institution that has thus far evaded the light of economic analysis: antitrust consents. In our view, competition authorities around the world should be asking themselves what ratio of litigation to settlement is optimal for their agency. Over the last 35 years, the United States Federal Trade Commission and the Antitrust Division of the Department of Justice have shifted dramatically toward greater reliance upon consent decrees than upon litigation to resolve antitrust disputes. As an aid to national competition agencies considering the desirability of adopting a similar approach, we focus upon the importance of economic analysis in evaluating movement along the continuum from a law enforcement model to a regulatory model of agency behavior. We draw upon the U.S. experience to substantiate our claim that the costs associated with a shift toward the regulatory model, including the potential distortion in the development of substantive antitrust doctrine, may be under-appreciated and discernable only in the long run. We acknowledge that consent decrees can and should be an important tool in an antitrust agency’s toolkit for resolving antitrust disputes. We contend, however, that a full economic analysis of reliance primarily upon consent decrees is necessary to inform each competition agency’s strategic decision about the optimal mix of law enforcement and regulatory techniques.     

Courts and New Democracies: Recent Works

Recent literature on comparative judicial politics reveals a variety of roles that courts adopt in the process of democratization. These include, very rarely, serving as a trigger for democratization and, more commonly, serving as downstream guarantor for departing autocrats or as downstream consolidator of democracy. In light of these roles, this article reviews six relatively recent books: Courts in Latin America, edited by Helmke and Rios‐Figueroa (2011 ); Judges Beyond Politics in Democracy and Dictatorship: Lessons from Chile, by Hilbink (2007 ); Cultures of Legality: Judicialization and Political Activism in Latin America, edited by Couso, Huneeus, and Sieder (2011 ); The Legacies of Law: Long‐Run Consequences of Legal Development in South Africa, 1652–2000, by Meierhenrich (2008 ); Judging Russia: Constitutional Court in Russian Politics 1990–2006, by Trochev (2008 ); and New Courts in Asia, edited by Harding and Nicholson (2010 ).     

COMPARING ANTITRUST ENFORCEMENT IN THE UNITED STATES AND EUROPE

Among the many important changes wrought by Regulation 1/2003are the decentralization of responsibility for enforcing EUcompetition law from Brussels to Member States and the creationof the European Competition Network to encourage coordinationand information-sharing among the 26 competition authoritiesin the EU. This article contrasts Europe's new system of competitionenforcement under Regulation 1/2003 with that of the UnitedStates. I focus upon two of the more significant features ofthe U.S. system: the dual legislative and enforcement authorityof the States and the Federal Government, and private enforcement.The Commission is presently evaluating measures to facilitateprivate enforcement and is set to release a Green Paper on thattopic later this year. I highlight a few characteristics thathave made private enforcement such a significant component ofthe U.S. antitrust regime, in some ways and at some times providingtoo much incentive for plaintiffs, at the expense of neutralor procompetitive business activity.