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The economic analysis of antitrust consents

Author

Listed:
  • Joshua D. Wright

    (George Mason University
    Global Antitrust Institute
    Wilson Sonsini Goodrich & Rosati)

  • Douglas H. Ginsburg

    (George Mason University
    Global Antitrust Institute
    United States Court of Appeals for the District of Columbia Circuit)

Abstract

Henry G. Manne, our friend, Mentor, and colleague, was a pioneer in the economic analysis of law. By consistently challenging the notion that existing institutions were well understood, he expanded the domain of economics to new and fertile ground. In that spirit, our goal in this article is to bring out of the shadows an institution that has thus far evaded the light of economic analysis: antitrust consents. In our view, competition authorities around the world should be asking themselves what ratio of litigation to settlement is optimal for their agency. Over the last 35 years, the United States Federal Trade Commission and the Antitrust Division of the Department of Justice have shifted dramatically toward greater reliance upon consent decrees than upon litigation to resolve antitrust disputes. As an aid to national competition agencies considering the desirability of adopting a similar approach, we focus upon the importance of economic analysis in evaluating movement along the continuum from a law enforcement model to a regulatory model of agency behavior. We draw upon the U.S. experience to substantiate our claim that the costs associated with a shift toward the regulatory model, including the potential distortion in the development of substantive antitrust doctrine, may be under-appreciated and discernable only in the long run. We acknowledge that consent decrees can and should be an important tool in an antitrust agency’s toolkit for resolving antitrust disputes. We contend, however, that a full economic analysis of reliance primarily upon consent decrees is necessary to inform each competition agency’s strategic decision about the optimal mix of law enforcement and regulatory techniques.

Suggested Citation

  • Joshua D. Wright & Douglas H. Ginsburg, 2018. "The economic analysis of antitrust consents," European Journal of Law and Economics, Springer, vol. 46(2), pages 245-259, October.
  • Handle: RePEc:kap:ejlwec:v:46:y:2018:i:2:d:10.1007_s10657-018-9579-6
    DOI: 10.1007/s10657-018-9579-6
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    Citations

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    Cited by:

    1. Cosnita-Langlais, Andreea & Tropeano, Jean-Philippe, 2022. "Learning by litigating: An application to antitrust commitments," International Journal of Industrial Organization, Elsevier, vol. 80(C).

    More about this item

    Keywords

    Antitrust; Competition law; Consent decrees;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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