Antitrust Remedies in a Systems Setting

• Author: Russell Pittman
• DOI: 10.1177/0003603X1105600103
• Published date: 01 March 2011
• Date: 01 March 2011
• Subject Matter: Article

Antitrust remedies in a systems setting

BYRUSSELL PITTMAN*

Many of the characteristics of systems sectors, far from presenting

dramatically new questions associated with the “new economy,”

exhibit parallels with the characteristics of the “old” network sectors

such as rail, electricity, and telecommunications. Regarding antitrust

remedies in systems markets, the article argues against a

presumption in favor of vertical separation and competition at the

components level, suggesting that in particular settings this remedy

may impose more harm and cost than benefit, and proposes that the

alternative paradigm of competition among vertically integrated

systems deserves equal privilege in the discussion. Lessons

suggested for antitrust remedies in a systems setting include (1)

greater emphasis on requirements to deal; (2) consideration of a

corresponding “prohibition from dealing,” along the lines of the line-

of-business restriction in United States v. AT&T; and (3) supple-

menting structural remedies with behavioral remedies in those

settings where first mover advantages and the possibility of tipping

render competition particularly fragile.

I. INTRODUCTION

What, if anything, is special about antitrust remedies in the context of

systems? Do the principles for fashioning remedies outlined in the

THE ANTITRUST BULLETIN:Vol. 56, No. 1/Spring 2011 :27

* Economic Analysis Group, Antitrust Division, U.S. Department of Jus-

tice, and New Economic School, Moscow.

AUTHOR’S NOTE: The views expressed herein are entirely mine and do not purport to

represent those of the U.S. Department of Justice.

© 2011 by Federal Legal Publications, Inc.