Bork and Microsoft: why bork was right and what we learn about judging exclusionary behavior

• Author: Harry First
• Position: Charles L. Denison Professor of Law, New York University School of Law
• Pages: 1017-1045

BORK AND MICROSOFT: WHY BORK WAS RIGHT

AND WHAT WE LEARN ABOUT JUDGING

EXCLUSIONARY BEHAVIOR

H

ARRY

F

IRST

*

The antitrust case brought by the Department of Justice against Microsoft is

rock solid.

— Robert H. Bork

1

Robert Bork nearly killed antitrust. As the 1960s populism of the Warren

Court threatened to turn into Woodstock antitrust in the 1970s, with Congress

contemplating legislation to deconcentrate oligopolies and put caps on corpo-

rate growth, and with the federal enforcement agencies getting expansive

“fairness” authority, pursuing shared monopoly theories, and bringing monop-

olization litigation against major high technology firms, Bork was honing the

case against antitrust as we knew it.

2

Starting with a polemical article in For-

* Charles L. Denison Professor of Law, New York University School of Law. A research

grant from the Filomen D’Agostino and Max E. Greenberg Research Fund at New York Univer-

sity School of Law provided financial assistance for this article. I thank Adam Shamah for his

excellent research assistance.

1

Robert H. Bork, The Case Against Microsoft 1 (no date) (unpublished manuscript) (on file

with author). For further information about this document, see infra note 77.

2

See Industrial Reorganization Act, S. 3832, 92d Cong., 2d Sess., 118 C

ONG

. R

EC

. 24917, at

tit. I, § 104(a) (1972); S. 1167, 93d Cong., 1st Sess., 119 C

ONG

. R

EC

. 7320, at tit. I, § 104(a)

(1973); S. 1959, 94th Cong., 1st Sess., 121 C

ONG

. R

EC

. 19221, at tit. I, § 104(a) (1975) (declar-

ing it “unlawful for any corporation or two or more corporations, whether by agreement or not,

to possess monopoly power in any line of commerce in any section of the country”); FTC v.

Sperry & Hutchinson Co., 405 U.S. 233, 244 (1972) (FTC’s jurisdiction to prohibit unfair meth-

ods of competition under Section 5 extends beyond antitrust laws; Commission can act like a

“court of equity.”); Kellogg Co., [1970–73 Transfer Binder] Trade Reg. Rep. (CCH) ¶ 19,898, at

21, 915 (Apr. 26, 1972) (charging four firms with illegally monopolizing the ready-to-eat cereal

market); Exxon Corp., [1973–76 Transfer Binder] Trade Reg. Rep. (CCH) ¶ 20,388, at 20,269

(July 17, 1973) (charging eight oil companies with monopolizing southeastern United States

petroleum market); J

OHN

H. S

HENEFIELD

, D

EP

’

TOF

J

USTICE

, A

NTITRUST

D

IVISION

M

EMORAN-

DUM ON

I

DENTIFICATION AND

C

HALLENGE OF

P

ARALLEL

P

RICING

P

RACTICES IN

C

ONCENTRATED

I

NDUSTRIES

(1978), reprinted in [July–Dec.] Antitrust & Trade Reg. Rep. (BNA), No. 874, at F-1

(July 27, 1978) (setting out circumstances that facilitate collusive behavior in oligopolistic indus-

tries); Complaint, United States v. IBM Corp., No. 69 Civ. 200 (S.D.N.Y. Jan. 17, 1969); Com-

plaint, United States v. AT&T Co., 427 F. Supp. 57 (D.D.C. 1976) (No. 74-1698).

1017

1018

A

NTITRUST

L

AW

J

OURNAL

[Vol. 79

tune Magazine, co-authored with his Yale colleague Ward Bowman, and then

elaborated on in more scholarly format in the Columbia Law Review, Bork

critiqued past antitrust decisions and argued for a reorientation of antitrust to

serve a single goal—consumer welfare.

3

Bork capped this effort with a book

that presented a much fuller critique of antitrust doctrine and a clear prescrip-

tion for a more narrowly focused antitrust future. The book, The Antitrust

Paradox, delayed by the “turbulence of the campus” in the early 1970s and

Bork’s government service from 1973–1977, was finally published in 1978.

4

The Antitrust Paradox came along at the right time. It was not the only

critique and reassessment of antitrust to appear then, of course; Richard Pos-

ner’s book providing an even more thorough economic-theory perspective on

antitrust doctrine was published two years before, for example.

5

But The Anti-

trust Paradox drew the most attention, from supporters and critics alike, and

seemed to be the leading edge of the movement to revolutionize antitrust.

6

Within two years, politics and antitrust moved to the right. Ronald Reagan

3

Robert H. Bork & Ward S. Bowman Jr., The Crisis in Antitrust, F

ORTUNE

, Dec. 1963, at

138; Robert H. Bork & Ward S. Bowman Jr., The Crisis in Antitrust, 65 C

OLUM

. L. R

EV

. 363

(1965); Robert H. Bork, Contrasts in Antitrust Theory I, 65 C

OLUM

. L. R

EV

. 401 (1965). For

later articles, see Robert H. Bork, The Supreme Court Versus Corporate Efficiency, F

ORTUNE

,

Aug. 1967, at 92; Robert H. Bork, Antitrust in Dubious Battle, F

ORTUNE

, Sept. 1969, at 103;

Robert H. Bork, Antitrust in Dubious Battle, 44 S

T

. J

OHN

’

S

L. R

EV

663 (1970). On Bork’s

elusive use of the term “consumer welfare,” see Barak Orbach, The Antitrust Consumer Welfare

Paradox, 7 J. C

OMPETITION

L. & E

CON

. 133, 142–49 (2011). The Bork and Bowman articles

were famously responded to in Harlan M. Blake & William K. Jones, In Defense of Antitrust,

F

ORTUNE

, Aug. 1964, at 135; Harlan M. Blake & William K. Jones, In Defense of Antitrust, 65

C

OLUM

. L. R

EV

. 377 (1965); Harlan M. Blake & William K. Jones, Toward a Three-Dimen-

sional Antitrust Policy, 65 C

OLUM

. L. R

EV

. 422 (1965).

4

R

OBERT

H. B

ORK

, T

HE

A

NTITRUST

P

ARADOX

: A P

OLICY AT

W

AR WITH

I

TSELF

(1978) [here-

inafter B

ORK

, A

NTITRUST

P

ARADOX

].

5

See R

ICHARD

A. P

OSNER

, A

NTITRUST

L

AW

: A

N

E

CONOMIC

P

ERSPECTIVE

(1976).

6

See Joseph E. Fortenberry, The Antitrust Paradox: A Policy at War with Itself by Robert H.

Bork, 78 C

OLUM

. L. R

EV

. 1347, 1348 (1978) (book review) (disagreeing with Bork’s views

concerning oligopoly and horizontal mergers, but commending Bork’s focus on the connection

between antitrust law and economics); Ernest Gellhorn, The Antitrust Paradox: A Policy at War

with Itself by Robert H. Bork, 92 H

ARV

. L. R

EV

. 1376, 1389 (1979) (book review) (praising book

as generally persuasive—indeed “seminal”—especially on oligopoly theory, vertical arrange-

ments, and the Supreme Court’s merger doctrine, but taking issue with Bork’s focus on effi-

ciency as the only goal of antitrust, assumption that price theory will always give clear answers,

and proposal that all horizontal mergers except those that give a firm more than 70 percent of the

market should be approved); Richard S. Markovits, Monopolistic Competition, Second Best, and

The Antitrust Paradox: A Review Article, 77 M

ICH

. L. R

EV

. 567 (1979) (book review) (disagree-

ing with Bork); James R. Silkenat, The Antitrust Paradox: A Policy at War with Itself, 127 U.

P

A

. L. R

EV

. 273, 280 (1978) (book review) (finding merit in Bork’s work “because it forces

consideration of economic and business factors that might not be given sufficient weight,” but

disagreeing with many of Bork’s arguments and concluding that “[f]ollowing all of Bork’s pre-

scriptions for policy would be even more myopic than rejecting all of his complaints.”); Oliver E.

Williamson, Review: The Antitrust Paradox: A Policy at War with Itself, 46 U. C

HI

. L. R

EV

. 526

(1979) (book review) (praising the completeness of Bork’s static economic analysis but arguing

that antitrust should not ignore firms’ strategic considerations or the existence of entry barriers).