The Report of the Attorney General's National Committee to Study the Antitrust Laws: a retrospective.

• Author: Kauper, Thomas E.

In 1955, the third year of the Eisenhower administration, the Michigan Law Review published what I believe to be the only symposium on antitrust law ever to appear in its pages. (1) The occasion was the release in March of that year of a Report of the Attorney General's National Committee to Study the Antitrust Laws, (2) a nearly four-hundred-page examination of virtually all facets of federal antitrust doctrine and enforcement. The pages of the symposium led me of course to revisit the Report itself, a visit a little like seeing an old high school friend long forgotten some forty years later. For those of us who were law students in the late 1950s, the Report was an old friend. It was our antitrust hornbook and many of us knew it well. With the discovery of an old friend, conversation is likely to turn, after an initial period of reminiscences, to how things have changed in the interval since parting. How have we fared, and how are things now as compared to then? These are the same questions that arise in revisiting the Report. How has it fared? What influence did it have? And how does the antitrust world it describes compare with the antitrust world of today?

The Report was prepared by a committee of fifty-nine lawyers, law professors and economists (the latter being a relatively small fraction of the group). The Committee was co-chaired by the Assistant Attorney General in charge of the Antitrust Division, Stanley N. Barnes and Professor S. Chesterfield Oppenheim of the University of Michigan Law School. Members of the Committee were appointed by Attorney General Brownell, who in turn had reviewed the tentative list of appointees with President Eisenhower. The Committee's charge from the Attorney General was to undertake "a thoughtful and comprehensive study of our antitrust laws." (3) President Eisenhower expected the Committee to "provide an important instrument to prepare the way for modernizing and strengthening our laws to preserve American free enterprise against monopoly and unfair competition." (4) Clearly this was a major undertaking, and expectations for the Committee's report were high.

The Report's release came in the midst of the cold war and its resulting international tensions. It was also a time of American economic strength. American firms did not yet face strong competition from European and Asian rivals, rivals whose strength would steadily increase over the next three decades but who in 1955 were still in the process of rebuilding following the ravages of World War II. American firms were eager to sell and invest outside the United States. Many national markets were effectively closed by tariffs, quotas, and other protectionist barriers. The European Community was as yet unborn. Few countries other than the United States had antitrust laws and enforcement in some of those who did was lax. Antitrust was largely an American phenomenon, taken seriously here but not so seriously abroad. Even in the United States, antitrust had had a somewhat checkered history. (5) But by 1955 there had been ten years of relatively steady and consistent enforcement. Private actions seeking treble damages, relatively uncommon before World War II, were increasing, although far from the numbers of three and four decades later. It was a propitious time to look at where American antitrust law had been and where it was, and should be going. It was also a time far different from today.

Today, terrorism has replaced the cold war. American firms face more competitive markets at home and abroad. As a result of the General Agreement on Tariffs and Trade ("GATT") and, more recently, the World Trade Organization ("WTO"), tariff and other government boundary-related barriers have fallen and globalization is the order of the day. The European Union now represents an integrated market as large as, or larger than, the United States. In the antitrust world, over eighty countries now have antitrust or competition policy legislation, in many cases actively enforced and in some, like the United States, applicable on an extraterritorial basis. (6) Antitrust is now international in scope. Enforcement officials today are concerned about cooperation among themselves and whether some form of multilateral agreements on antitrust matters is either necessary or desirable. Antitrust in the 80s and 90s was an export, with the United States and European authorities actively promoting the enactment of their own version by other nations. In this new world, the Report may seem quaint or so out of date as to be classified as antique or a no longer relevant piece of history. Yet in some respects the Report seems as current as if it were released today.

The Attorney General's Report had some influence, although not as much as the Committee undoubtedly would have liked. A number of its recommendations were followed in legislative enactments and policy developments, although sometimes in circuitous ways. The Report was relied upon by the Supreme Court as recently as 1990. (7) Other recommendations and suggestions were ignored or, in some cases, simply rejected. Today, the Report and the commentary on it provide a benchmark against which nearly fifty years of antitrust development can be measured.

The Report was a remarkable exercise in consensus building. While there are dissents from some of its recommendations, it reflects unanimity throughout most of its eight chapters. The achievement of a consensus in a committee of fifty-nine members obviously required compromises, some of which are clear in the Report. It is also clear that a readily identifiable group of members simply did not agree with the general thrust of the Report, feeling that the Report overall would unduly relax both antitrust doctrine and enforcement. (8) These members and others felt that the decision of the Committee to provide a detailed examination of case law in some areas and not to provide an empirical analysis of the impact of antitrust on the economy fell short of the kind of study contemplated when the Committee was commissioned. This is a fair criticism, although it is also true that such empirical analyses have not been done since. Perhaps the task is too daunting or simply not doable at all. American antitrust rests heavily on what in the end is an act of faith, faith that markets work and are in large part self-correcting. Antitrust rules have reflected more an exercise in building a superstructure of logic upon a base of that faith. Seldom has doctrine been built on empirical data. The Attorney General's Report and the consensus it manifests therefore stand firmly in antitrust's tradition. Substantively, the Report analyzes existing case law in detail, a far easier task than would be the case today because there were far fewer cases to talk about. The discussion, particularly the discussion of sections 1 and 2 of the Sherman Act in chapter 1, is generally without criticism. The focus is on what the law is, not what the law should be. It is more hornbook than critique. Hence its appeal to law students at examination time.

The structure of the Report itself says much about the antitrust of 1955. Distribution issues, including refusals to deal, tying, exclusive dealing, resale price maintenance, and the Robinson-Patman Act, comprise eighty pages. (The Robinson-Patman Act alone takes over fifty pages). The discussion of horizontal relationships--price fixing, territorial divisions, conscious parallelism, monopolization and attempt to monopolize--is done in less than sixty pages. In the chapter on administration and enforcement, forty-five pages are devoted to the Justice Department and FTC, while only eight deal with private actions. Mergers merited their own chapter, fourteen pages in all. On the other hand, and somewhat surprising perhaps to those who believe problems of extraterritoriality and competitive problems of international trade are something that have come with globalization, nearly fifty pages are given over to these subjects. Finally, the Report's next to last chapter (preceding only the chapter on administration) is devoted to economic analysis, particularly the concept of "workable competition." All of this can simply be gleaned from the Table of Contents.

The framework of the Report suggests a preoccupation with distribution issues and particularly with the Robinson-Patman Act. While their numbers were increasing, treble damage actions had not yet achieved the significance of later years. (9) Mergers were not a major issue, although the Report recognized that they could become a major matter in years ahead. In 1955, however, there had been virtually no cases under section 7 of the Clayton Act as amended in 1950. Foreign commerce concerns were already a reality, even at a time when few countries other than the United States had antitrust laws. Economics was still working only at the margins of antitrust decisionmaking. The placement of the economics chapter suggests an afterthought, or at least not a perception that economic analysis was central either in the development of antitrust policy or litigation.

If such a Report were written today, I believe it would look far different. Distribution issues would be a minor element. The Robinson-Patman Act would get scant attention. Tying arrangements would undoubtedly be more directly addressed. Mergers and joint ventures (the latter not even alluded to in the Report) would take many pages. Section 2 of the Sherman Act would require more discussion and would be more controversial. Analysis and critique of government guidelines, a phenomenon that was nonexistent in 1955, would be significant. Economic analysis would be given a preeminent, if not predominant, role. A committee of the type that drafted the 1955 Report would undoubtedly have less patience with simple case analysis and would be more prone to criticism of established doctrine, making far heavier use of economics to do so.

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