Was the crisis in antitrust a trojan horse?

• Date: 01 December 2014

WAS THE CRISIS IN ANTITRUST A TROJAN HORSE?

B

ARAK

O

RBACH

*

Fifty years ago, in 1963, Professor Robert Bork embarked on a 15-year

journey in antitrust.

1

The journey began with a provocative essay in Fortune

Magazine, The Crisis in Antitrust,

2

which Bork co-wrote with Ward Bowman.

It concluded in 1978 with the publication of The Antitrust Paradox: A Policy

at War with Itself.

3

The Antitrust Paradox is undeniably the most influential

* Professor of Law, The University of Arizona College of Law. This essay greatly benefited

from comments and suggestions from Harry First, Alan Frankel, Leon Greenfield, Douglas Gins-

burg, Ariel Katz, Sivan Korn, Robert Lande, Steven Salop, Daniel Sokol, and the participants at

The Influence of Robert Bork on Antitrust Law: A Retrospective (Sept. 27–28, 2013) and Next

Generation of Antitrust Scholars Conference (Jan. 17, 2014). I am particularly indebted to

George Priest for invaluable conversations and exchanges regarding antitrust history and the

antitrust legacy of Robert Bork.

1

The phrase “Bork’s journey in antitrust” refers to Robert Bork’s published antitrust works

between 1963 and 1978. During this period, Robert Bork engaged in many professional activities

other than writing those works, including serving as the U.S. Solicitor General. Bork was active

in antitrust before embarking on his journey in 1963 and after its conclusion in 1978. See,e.g.,

Robert Bork, Vertical Integration and the Sherman Act: The Legal History of an Economic

Misconception, 22 U. C

HI

. L. R

EV

. 157 (1954); Robert H. Bork, Ancillary Restraints and the

Sherman Act, 15 ABA A

NTITRUST

S

EC

. 211 (1959); Robert H. Bork, Anticompetitive Enforce-

ment Doctrines Under Section 7 of the Clayton Act, 39 T

EX

. L. R

EV

. 832 (1961); Robert Bork,

Control of Sales, 7 A

NTITRUST

B

ULL

. 225 (1962). In the landmark case of Brooke Group Ltd. v.

Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993), Robert Bork successfully argued for

Brown & Williamson. Phillip Areeda argued for Brooke Group. See also Robert H. Bork, What

Does the Chicago School Teach About Internet Search and the Antitrust Treatment of Google, 8

J. C

OMPETITION

L. & E

CON

. 663 (2012); Harry First, Bork and Microsoft: Why Bork Was Right

and What We Learn About Judging Exclusionary Behavior,infra this issue, 79 A

NTITRUST

L.J.

1017 (2014).

2

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

ORTUNE

, Dec. 1963, at

138 [hereinafter Bork & Bowman, The Crisis]. The Antitrust Bulletin and Columbia Law Review

reprinted the essay in 1964 and 1965, respectively, at 9 A

NTITRUST

B

ULL

. 587 (1964); and 65

C

OLUM

. L. R

EV

. 363 (1965). The essay is an expanded version of comments Bork made in

August 1963 at a symposium of the Antitrust Section of the American Bar Association. See

Symposium, Re-evaluation of the Impact of Present-Day Antitrust Policy on the Economy, 23

ABA A

NTITRUST

S

EC

. 288, 319–23 (1963).

3

R

OBERT

H. B

ORK

, T

HE

A

NTITRUST

P

ARADOX

: A P

OLICY AT

W

AR WITH

I

TSELF

(1978). Bork

finished the first draft of The Paradox in 1969. He opened the book stating: “[I]n the ordinary

course the book would have been rewritten during 1970 and published, probably in 1971. The

turbulence of the campus during those years and certain personal concerns . . . precluded serious

work.” Id. at ix.

881

882

A

NTITRUST

L

AW

J

OURNAL

[Vol. 79

work in modern antitrust and also the most controversial one. Robert Bork’s

journey in antitrust was remarkably successful in changing the antitrust law

and policy landscape. It provoked lawyers and economists, leaving no mind

indifferent to the positions he expressed.

4

Bork’s remarkable success, however, was not predestined. Other antitrust

giants of the era, such as Phillip Areeda, Richard Posner, and Donald Turner,

also influenced antitrust analysis and policy. Like Bork, they argued that eco-

nomics should direct antitrust analysis, were critical of noneconomic consid-

erations in antitrust, and perceived most vertical arrangements as legitimate

business practices. Notwithstanding others’ intellectual contributions, how-

ever, Bork was probably most responsible for the change in the course of

antitrust through his “consumer welfare” standard.

In the antitrust mythology, the success of Robert Bork in influencing anti-

trust policy is often attributed to his shrewd use of confusing terminology that

functioned as a Trojan horse. Antitrust warriors—scholars and advocates—

have argued that Robert Bork concealed economic methodologies and effi-

ciency standards in a framework of “consumer-oriented law,”

5

deceiving the

guardians of the old regime by stating that “[t]he Sherman Act was clearly

presented and debated as a consumer welfare prescription.”

6

The Supreme

Court, the narrative goes, endorsed this prescription without examining its

nature or implications.

7

I call these speculations and allegations “the Trojan

Horse Hypothesis.”

Trojan horses represent the victory of both deceit and genius. The Trojan

Horse Hypothesis posits that Bork’s success in bending antitrust to his will

was such a victory. This essay examines the underlying sources of the Trojan

Horse Hypothesis, its validity, and its significance to modern antitrust policy.

Robert Bork’s antitrust philosophy rested on two flawed propositions: (1)

Congress enacted the Sherman Act as “a consumer welfare prescription,” and

(2) the economic concepts of “competition,” “consumer welfare,” and “alloca-

tive efficiency” are largely equivalent. The first proposition has no factual

support, and the second proposition is clearly flawed. To believers in the Tro-

4

See,e.g., Harlan M. Blake & William K. Jones, In Defense of Antitrust, F

ORTUNE

, Aug.

1964, at 135, reprinted in 65 C

OLUM

. L. R

EV

. 377 (1965).

5

See,e.g., B

ORK

,supra note 3, at 7; Robert Bork, Resale Price Maintenance and Consumer

Welfare, 77 Y

ALE

L.J. 950, 951 (1968) [hereinafter Bork, Resale Price Maintenance]; Robert H.

Bork, Antitrust in Dubious Battle, F

ORTUNE

, Sept. 1969, at 103 [hereinafter Bork, Antitrust in

Dubious Battle].

6

B

ORK

,supra note 3, at 66.

7

Reiter v. Sonotone Corp., 442 U.S. 330, 343 (1979); NCAA v. Bd. of Regents of Univ. of

Okla., 468 U.S. 85, 107 (1984). See generally Barak Orbach, How Antitrust Lost Its Goal, 81

F

ORDHAM

L. R

EV

. 2253 (2013).