Presenting keynote remarks today at the Antitrust Practice Group Retreat sponsored by Washington, D.C. law firm Howrey, Simon, Arnold & White, Federal Trade Commission General Counsel William Kovacic said that by examining antitrust policy evolution and by focusing on its cumulative development, a better understanding can be formed of what government agencies must do to improve their performance in the future.
In his remarks, entitled "The Modern Evolution of U.S. Competition Policy Enforcement Norms," Kovacic stressed that continuity is more representative of the nation's antitrust experience from the 1960s to late 1990s, and that by looking at a variety of models that have been put forward, one can develop an understanding of the evolution of antitrust "norms" - consensus views of what public competition authorities ought to do.
According to Kovacic's remarks, the common narrative of U.S. antitrust experience depicting federal enforcement policy since the 1960s as a swinging pendulum - too active in the 1960s and 1970s, too passive in the 1980s, and properly moderate in the 1990s - while "unmistakably popular, ought to cause discomfort within the competition policy community." Taken on its own terms, Kovacic continued, the pendulum model "casts doubt upon the stability and legitimacy of U.S. antitrust enforcement authority."
Disputing the pendulum narrative, Kovacic stated that antitrust law enforcement norms have evolved since the 1960s, becoming generally accepted standards in a competition policy system. Compared to the pendulum narrative, he interpreted the modern antitrust experience as emphasizing elements of continuity and the cumulative nature of public regulatory enforcement. While acknowledging certain differences across eras, he said that a better analysis avoids the exaggerations "that reinforce the pendulum narrative's delineation of sharply defined, self-contained enforcement periods and supports sharp juxtapositions in its 'before and after' description of policymaking."
Kovacic's detailed analysis examined the evolution of modern antitrust authority in five parts, including a presentation of the basic ingredients of the pendulum narrative, the concepts of norms in the context of public antitrust enforcement, the concept of constrained continuity as an alternative to the pendulum narrative, a review of enforcement data to illustrate the development of antitrust enforcement norms, and an explanation of why the pendulum narrative has been embraced despite its "doubtful representation of actual experience." In addition, Kovacic discussed institutional implications of U.S. experience for the development of competition policy programs within individual antitrust systems and across jurisdictions.
Also key to Kovacic's remarks was the idea put forward that the "essential stability" that recent scholarship has found in federal merger policy across the 1980s and 1990s also characterizes core elements of non-merger enforcement. Such stability would have been unattainable had the norms embraced by the FTC and Department of Justice in the 1980s generally lacked durable intellectual and institutional foundations and "merely reflected aberrant, doctrinaire preferences of incumbent officials."
In summarizing his remarks, Kovacic said, "We need not put our faith in this fractured account of antitrust history. A better reading of U.S. experience acknowledges adjustments in enforcement norms over time but appreciates the importance of continuity. By seeing how policy actually evolves, we can better understand what agencies must do to improve their performance in the future. We should measure public officials by their willingness to recognize their interdependencies and make the type of institutional investments that promote quality over the long term."
The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, D.C. 20580, Electronic Mail: email@example.com; Telephone (202) 326-3300. For more information on the laws that the Commission enforces, the Commission has published "Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws," which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.