ANTITRUST'S 'CURSE OF BIGNESS' PROBLEM.

• Author: Sokol, D. Daniel

THE CURSE OF BIGNESS: ANTITRUST IN THE NEW GILDED AGE. By Tim Wu. New York: Columbia Global Reports. 2018. Pp. 14, 139. $14.99.

INTRODUCTION

Tim Wu (1) is the most important academic popularizer of law and technology debates (2) and is the intellectual leader of the neo-Brandeisian antitrust movement. He has brought antitrust from a technical subject of interest only to antitrust practitioners and academics to the forefront of policy discussions around the world. His ability to help shape policy is impressive. He is smart and a beautiful writer--an effective combination. Merely for making antitrust relevant to the general population, Wu deserves credit.

Wu's most recent book, The Curse of Bigness: Antitrust in the Gilded Age, is an attempt to reframe contemporary antitrust debates by returning antitrust to its more populist roots. Given the global implications of his ideas and policy proposals (including breakup of tech platforms) for many of the large corporations that he takes on, The Curse of Bigness offers profound insights for how society and business should be organized.

Antitrust and scrutiny of large tech platforms like Amazon and Facebook are hot issues in policy circles. For critics like Wu, the growing concentration of American power and the rise of tech platforms are nothing less than a threat to American democracy (pp. 16, 55). Wu sees the current growth of large tech companies as the result of a generation of antitrust legal misapplication and harks back to an earlier era of significant antitrust enforcement (pp. 17-21).

Wu's work is powerful and provocative. He makes several important points about how to think about the body of antitrust law. Wu would abandon the current legal framework of antitrust. However, although antitrust has made some tactical mistakes over forty years, the antitrust enterprise is not broken in need of total retrofit. Moreover, Wu's policy prescriptions are not sensitive to administrability concerns. Antitrust law is akin to common law. (3) Congress has purposely chosen not to make significant changes in antitrust's fundamental structure but has left it to the courts to fill in the gaps. Given this reality, more constructive criticisms would go to how to shift doctrine in ways that might promote some of the changes that Wu seeks. (4)

The first part of this Review summarizes Wu's major claims. It then highlights some of his critiques as to "bigness," the multiple goals of antitrust, and the missed opportunities as to cases that should have been or need to be brought, such as against tech companies. Some of Wu's critiques are spot on in identifying missed opportunities, like a number of horizontal mergers that should have been challenged. Where Wu's book suffers is where he undervalues the institutional structure of antitrust law, underplays what antitrust does well as a substantive matter, and misanalyzes antitrust and tech platforms.

1. POLITICAL ANTITRUST?

   The Curse of Bigness is a fundamental challenge to the "Chicago School" and its approach to the analysis of antitrust law that has dominated the United States since the 1970s. Robert Pitofsky wrote an important article in 1979 that guides Wu's analysis. Published in the famous symposium issue of the University of Pennsylvania Law Review, the article signaled the end not merely of populism but of the structure-conduct-performance paradigm. (5) Pitofsky chastised antitrust scholars for "persuading the courts to adopt an exclusively economic approach to antitrust questions." (6) He argued that "[i]t is bad history, bad policy, and bad law to exclude certain political values in interpreting the antitrust laws." (7) Pitofsky explained political values in a populist manner by noting,

   if the free-market sector of the economy is allowed to develop under antitrust rules that are blind to all but economic concerns, the likely result will be an economy so dominated by a few corporate giants that it will be impossible for the state not to play a more intrusive role in economic affairs. (8) Wu's book is part of this legacy. Wu is a powerful writer and explores similar themes with great passion and resolve. For example, he writes, "[antitrust] does strike at the root cause of private political power--the economic concentration that facilitates political action" (p. 23). Elsewhere, in describing the neo-Brandeisian agenda he explains, "these suggestions would help us return to an economic vision that prizes dynamism and possibility, and ultimately attunes economic structure to a democratic society" (p. 138).

   Wu's major insight is to suggest that there needs to be a broader set of goals for antitrust beyond consumer welfare to address this populist impulse. (9) What this looks like in practice is not something that Wu spends much time developing.

   Injecting political trade-offs into antitrust can have negative repercussions. In a world of multiple goals, government may pick winners and losers and may do so with something other than the public interest in mind. (10) Wu would replace antitrust as we know it with a regulatory system akin to what one finds in other administrative agencies (a public interest standard with some "fairness" element, industry comments on mergers, banning mergers of a certain size, among others features) (pp. 127-39). This solution is subject to the same capture concerns one finds in other agencies and would not adequately address Wu's concerns. Wu does not provide a mechanism to prevent special interests from lobbying to promote their interests over consumers' with a veneer of "fairness." Indeed, Wu's previous writing in the telecom context suggests that capture is a significant risk. (11) The Robinson-Patman Act, discussed in Section V, illustrates the folly of a public interest-based antitrust.

   Academics often change their approach following a stint in practice. Wu had short stints in government during the Obama Administration but not in a senior leadership role with managerial oversight in helping to run an agency. Such a position might have made Wu focus more on administrability concerns. When Pitofsky chaired the FTC in the 1990s, he did not adopt a populist agenda or embrace multiple goals as in his earlier writing. Rather, he continued with the economic framework that was established by prior Republican and Democratic administrations, and his tenure is seen as a "golden age" of antitrust. (12) Nor is Pitofsky alone in reworking his criticisms within an economics framework and abandoning a more populist approach to antitrust. Indeed, Wu's other antitrust works embrace economic analysis to guide antitrust and do not suggest the need for noneconomic values. (13) This suggests the difference between making academic pronouncements and having to create real change given institutional constraints when handed power.

   Wu shows nuance with two sets of critiques. One is a populist critique that Wu calls "neo-Brandeisian," which questions the singular efficiency-based goal expressed explicitly and repeatedly in the Supreme Court's antitrust jurisprudence and practiced by the two antitrust agencies (pp. 78-92). The second critique is within a law and economics tradition but suggests modifications to doctrine based on flaws in Chicago School assumptions (pp. 106-07).

   Wu makes an important contribution, namely that some basic assumptions made by the Chicago School were crude or simply wrong and that improved economic analysis based on more precise models and more informed empirical work offers some alternative approaches for moving antitrust forward. He properly articulates that some Chicago assumptions, based on overly simplistic economics, may lead to bad results (pp. 102-09).

   But Wu underestimates the current institutional setup of antitrust, in which a bad doctrine could be reshaped into something less harmful. As a result of the current institutional setup, antitrust addresses pure antitrust issues relatively well but other issues like privacy (14) or traditional regulation (15) less well. After suggesting that antitrust should be about such trade-offs, Wu does not offer insights into how to address the trade-off of efficiency and fairness inherent in a public interest standard. (16) What would an administrable set of cases to guide future business behavior look like? What would the workable legal rule be? What would be the burdens of proofs and the presumptions? On these issues, Wu does not offer detailed insights. But if the claim is that antitrust must change because of new realities in concentration and tech, it is incumbent on those proposing changes to offer a workable system. The strength of the current approach is how it marries economic analysis with legal administrability. (17)

   Wu's conception of competition would be a broader "protection of competition" approach that focuses on the competitive process and looks beyond price effects (p. 136). But a broader competitive process has a populist element to it because it supports inefficient competitors, (18) and populism does not work within antitrust's institutional structure. Understanding economic analysis and antitrust's institutional structure of judge-made law explains why antitrust has evolved and why a populist embrace, short of new legislation, is unlikely to succeed. Antitrust is primarily federal law. But antitrust "common law" functions somewhat differently than other fields. Antitrust's enabling legislation allows for common law-like development. (19) In practice, statutes such as the Sherman Act enjoy a certain rank akin to constitutional common law. (20)

   The Supreme Court offered an early articulation of this constitution-like principle to the Sherman Act in Appalachian Coals, Inc. v. United States. (21) There, the Court stated, "As a charter of [economic] freedom, the [Sherman] Act has a generality and adaptability comparable to that found to be desirable in constitutional provisions." (22) This framework changes how the Supreme...