Playing Nicely With Others: How and Why Antitrust Enforcers Should Work Together

• Author: Christine P. Bartholomew
• Position: Professor, University at Buffalo School of Law, the State University of New York
• Pages: 241-296

PLAYING NICELY WITH OTHERS: HOW AND WHY

ANTITRUST ENFORCERS SHOULD WORK

TOGETHER

C

HRISTINE

P. B

ARTHOLOMEW

*

INTRODUCTION ............................................... 241

I. THE NONHIERARCHICAL U.S. ANTITRUST

ENFORCEMENT SYSTEM

............................... 243

A. S

HARED

E

NFORCEMENT

A

UTHORITY

.................... 243

B. B

ENEFITS OF

O

VERLAPPING

E

NFORCEMENT

.............. 247

II. ANTITRUST INFIGHTING

............................... 254

A. D

EFINING

A

NTICOMPETITIVE

C

ONDUCT

.................. 255

B. A

NTIPATHY

T

OWARD

P

RIVATE

E

NFORCEMENT

:

U

NDERMINING

I

NDIRECT

P

URCHASERS

................... 262

C. H

ANDICAPPING

O

THER

E

NFORCERS

..................... 268

III. MITIGATING CONFLICT BETWEEN ENFORCERS

...... 275

A. P

RINCIPLES OF

O

VERLAPPING

E

NFORCEMENT

............. 276

1. Maximize the Benefits of Multiple Enforcers ........ 276

2. Avoid Mission Drift ............................... 283

3. Share the Enforcement Lane ....................... 286

B. S

TRENGTHENING

A

NTITRUST

E

NFORCEMENT

T

HROUGH

C

OLLABORATION

...................................... 290

CONCLUSION .................................................. 295

INTRODUCTION

With the Clayton Act, Congress intended a synergistic relationship among

public and private antitrust enforcers

1

that would maximize the consumer pro-

* Professor, University at Buffalo School of Law, the State University of New York. The

author would like to thank Christopher Leslie, Eleanor Fox, D. Daniel Sokol, Spencer Weber

Waller, William Kovacic, the attendees of the 2021 U.C. Irvine Antitrust Roundtable, as well as

fellow contributors to the Antitrust Law Journal’s symposium, The Future of Antitrust Institu-

tions. Special thanks to my research assistants, Hannah Atkinson and Kimberly VanOpdorp, for

their tireless efforts.

1

See, e.g., United States v. Borden Co., 347 U.S. 514, 518 (1954) (discussing how antitrust

enforcers, both private and public, “were designed to be cumulative, not mutually exclusive”).

241

242

A

NTITRUST

L

AW

J

OURNAL

[Vol. 85

tection goals underlying the Sherman Act.

2

Commonly, private enforcement

follows governmental investigations by federal and/or state agencies. How-

ever, as public enforcement has declined, private enforcement has shouldered

a greater enforcement load.

3

Antitrust class actions frequently expand nascent

government cases: they can reach additional wrongdoers or wrongdoing,

4

re-

vive investigations that government enforcers dropped,

5

and even lead the

charge in some actions.

6

Yet lately, the relationship between antitrust enforcers is often acrimonious.

This article focuses on one source of this rift: namely, conduct by the Anti-

trust Division of the Department of Justice that leaves other enforcers battling

more than just defendants. This conflict jeopardizes the very goals Congress

intended.

To be clear, in raising these claims, the point of this article is not to malign

attorneys at the DOJ. Quite the contrary, the Antitrust Division is staffed with

highly skilled attorneys devoted to combating the dangers of anticompetitive

conduct. Examining enforcement flaws, however, is a necessary precursor to

progress. As a former commissioner of the Federal Trade Commission has

expressed, the “[s]tudy of enforcement successes and failures” guides “the

healthy development of the antitrust laws.”

7

2

See Blue Shield of Va. v. McCready, 457 U.S. 465, 472 (1982) (noting that Congress cre-

ated private enforcement to “deter violators and deprive them of the fruits of their illegal actions,

and would provide ample compensation to the victims of antitrust violations”); Apple Inc. v.

Pepper, 139 S. Ct. 1514, 1518, 1524 (2019) (speaking on “the longstanding goal of effective

private enforcement and consumer protection in antitrust cases”).

3

Government oversight by the DOJ, the FTC, and state enforcers often depends on political

whim and financial backing—which change by administration. See Spencer Weber Waller, The

Incoherence of Punishment in Antitrust, 78 C

HI

.-K

ENT

L. R

EV

. 207, 230 (2003) (“[E]nforcement

priorities change from administration to administration, or with appointment of a new Assistant

Attorney General or FTC chair.”).

4

See, e.g., Order Granting Plaintiffs’ Motion for Attorneys’ Fees, Reimbursement of Ex-

penses, and Incentive Award, In re Anadarko Basin Oil & Gas Lease Antitrust Litig., No. 16-cv-

00209 (W.D. Okla. Apr. 25, 2019), ECF No. 244; Corrected Memorandum in Support of Class

Plaintiffs’ Motion for Final Settlement Approval and Award of Attorneys’ Fees, Reimbursement

of Expenses, and Incentive Payments, Schagringas Co. v. BP Prods., No. 06-cv-3621 (E.D. Ill.

Mar. 10, 2009), ECF No. 152.

5

See, e.g., Memorandum of Law in Support of Class Counsel’s Motion for an Award of

Attorneys’ Fees & the Reimbursement of Expenses at 15, In re Carbon Black Antitrust Litig.,

No. 03-cv-10191 (D. Mass. Sept. 11, 2007), ECF No. 326 (discussing how DOJ “had closed their

investigations of the defendants”); Memorandum in Support of Plaintiffs’ Motion for Final Ap-

proval of Settlement with all Defendants, In re Credit Default Swaps Antitrust Litig., No. 13-md-

02476 (S.D.N.Y. Apr. 1, 2016), ECF No. 503.

6

See, e.g., Memorandum in Support of Approval of Attorneys’ Fees as Reasonable, Hemphill

v. San Diego Ass’n of Realtors, Inc., No. 04-cv-01495 (S.D. Cal. Jan. 25, 2005), ECF No. 100;

Direct Purchaser Plaintiffs’ Motion for Attorneys’ Fees, Expenses, and Service Award, In re

Resistors Antitrust Litig., No. 15-cv-03820 (N.D. Cal. June 10, 2019), ECF No. 543.

7

Joshua D. Wright et al., Requiem for a Paradox: The Dubious Rise and Inevitable Fall of

Hipster Antitrust, 51 A

RIZ

. S

T

. L.J. 293, 295 n.6 (2019).

2023]

P

LAYING

N

ICELY WITH

O

THERS

243

This article explores this lurking risk to U.S. antitrust enforcement. When

private and public enforcers clash, regulatory oversight suffers. Part I details

the multiple U.S. antitrust enforcers and their complementary functions. Part

II explores the DOJ’s conduct in overlapping parallel litigation and gives ex-

amples where the DOJ compromised other enforcers’ regulatory efforts.

These examples expose an operational flaw in the U.S. antitrust enforcement

design that contributes to underenforcement. Finally, Part III paves a path

forward. It articulates a set of best practices to realign private and public anti-

trust enforcement efforts. It then urges the adoption of an all-enforcer working

group unified toward this end.

I. THE NONHIERARCHICAL U.S. ANTITRUST

ENFORCEMENT SYSTEM

The United States adopts a belt and suspenders approach to antitrust en-

forcement. Federal, state, and private enforcers share overlapping authority to

regulate anticompetitive conduct.

8

This Part details the function of each player

and identifies where both complimentary and concurrent regulatory oversight

exist. It then discusses the benefits of this intentional structure.

A. S

HARED

E

NFORCEMENT

A

UTHORITY

Federal and state public enforcers, alongside private actors, provide over-

sight to U.S. antitrust. Federal enforcement by the DOJ and the FTC stems

from different legislative authority. The DOJ enforces the Sherman Act, while

the FTC enforces the FTC Act.

9

Though the substantive violations for both

agencies overlap (a violation of the Sherman Act generally fulfills the require-

ments for a claim under Section 5 of the FTC Act),

10

the remedies each can

pursue differ. Aside from proprietary claims, the DOJ can recover injunctions

and monetary penalties limited to a statutory maximum of twice the gross gain

or twice the actual loss (meaning affected sales).

11

In its standalone antitrust

cases (those it brings under § 13(b) of the FTC Act), the FTC may only seek

8

See Zachary D. Clopton, Redundant Public-Private Enforcement, 69 V

AND

. L. R

EV

. 285,

296, 300–01 (2016).

9

15 U.S.C. §§ 41–58; 28 C.F.R. § 0.40.

10

Justin Hurwitz, Chevron and the Limits of Administrative Antitrust, 76 U. P

ITT

. L. R

EV

.

212, 216–17, 254 (2014).

11

Bruce H. Kobayashi, Antitrust, Agency and Amnesty: An Economic Analysis of the Criminal

Enforcement of the Antitrust Laws Against Corporations, 69 G

EO

. W

ASH

. L. R

EV

. 715, 724

(2001); see Robert H. Lande & Joshua P. Davis, Comparative Deterrence from Private Enforce-

ment and Criminal Enforcement of the U.S. Antitrust Laws, 2011 B.Y.U. L. R

EV

. 315, 326

(2011); see also Einer Elhauge, Disgorgement as an Antitrust Remedy, 76 A

NTITRUST

L.J. 79, 80

(2009) (“The recent Bush administration Department of Justice took the position that it had the

authority to seek disgorgement for antitrust violations, and both the Bush and Clinton Depart-

ments of Justice actually obtained disgorgement in contempt actions for violations of consent

decrees.”).