Andrew Gavil examines the Biden Administration’s antitrust policy, placing it in the broader historical context of evolving competition law. He questions the fit of Kuhn’s concept of paradigm shift for antitrust policy and argues instead that Biden’s initiatives reflect the unique demands of the digital economy and the true nature of antitrust, which is ever evolving.
This article is part of a symposium studying the “paradigm shift” in antitrust scholarship and policy. Inspired by philosopher Thomas Kuhn’s work on progress in science, this symposium asks if and how the tenures of Federal Trade Commission Chair Lina Khan, Department of Justice Assistant Attorney General Jonathan Kanter, and scholarship associated with the antimonopoly or Neo-Brandeisian movement has changed how we understand the priorities of antitrust enforcement, evidence of anticompetitive harm, and the study and enforcement of antitrust more broadly. Over the next few days, we will publish contributions from Tim Brennan, Eleanor Fox, Daniel Francis, Andrew Gavil, Richard Markovits, John Mayo, Steven Salop, and Randy Stutz. You can read the previously published articles here. ProMarket encourages our readers to respond to the symposium and the ideas these scholars put forth with their own. Responses can be sent to ProMarket@chicagobooth.edu.
The prompt for this symposium was inspired by Thomas Kuhn’s groundbreaking 1962 work, The Structure of Scientific Revolutions, in which he explored the concept of “paradigm shifts.” As scientist and historian, he sought out the root causes of the kinds of major advances in scientific knowledge associated with the likes of Copernicus, Newton, Lavoisier, and Einstein. We’ve been asked to consider whether antitrust is at such a juncture. Are we witnessing or participating in a genuine “paradigm shift”?
Unlike the scientific paradigms that interested Kuhn, if there is an antitrust paradigm, its most fundamental characteristic is the absence of immutable content. It has been and remains – by design – adaptable. This is not to suggest that it is entirely fluid. Antitrust is rooted in core principles and concerns about competition. But those principles and concerns can be deployed differently under the influence of more or less interventionist political and economic philosophies and movements. Competition policy, and antitrust law, therefore, are continuing works in progress. Industries and economies are not fixed in time. Antitrust policy rarely dips its toe twice in the same economy. Antitrust is more Heraclitus—who posited constant flux—than Kuhn.
Viewed through that lens, the Biden Administration’s antitrust program will perhaps best be remembered as a reflection of its time, perhaps a reaction to it, and surely an effort to influence its direction. Under Biden, United States reformers joined the vanguard of a burgeoning and global movement to retool competition policy to adapt to the needs of the information age. More broadly, they sought to resuscitate and expand some of U.S. antitrust law’s traditional concerns and to integrate them into a more comprehensive economic program.
Genuinely transformational change, however, is not easy to achieve. It is especially challenging when antitrust enforcers seek to “ramp up”—to increase, rather than diminish—the level and type of enforcement. As this essay discusses, success for such aspiring reformers depends on factors that can facilitate or inhibit their priorities, and which may lie beyond the control of any new administration. In short, the antitrust stars must be aligned.
Antitrust and Industrial Change
From its earliest days, antitrust policy has gravitated towards the industrial giants of the day. This was true when the advent of trusts prompted the adoption of the Sherman Act and has remained true for much of its history. From railroads, oil, and steel, to newspapers, shoe machinery, mass retailing, banking, and later mainframe computing, telecommunications and platform software, the attention of antitrust policymakers and enforcers has been drawn to the most impactful industries of the time.
It is not at all surprising, therefore, that in the twenty-first century antitrust policy turned its attention to some of the largest technology-focused firms, albeit not exclusively. This does not reflect a paradigm shift, but rather a continuation of a long-standing tradition. Another manifestation of that tradition is the periodic confluence of rapid growth, distinctive industry characteristics, and increased academic and government interest in studying these dynamics.
Cutting-edge industries can be the catalysts for better economic understanding and the evolution of legal doctrine. New products and services and new business models may lead to the development of new theories of competitive harm and benefit and new tools for analysis. Flagging “old wine in new bottles,” on the other hand, can reaffirm the utility of established methods. Antitrust can appear to be “on the move” out of necessity. And it might be, as professor Mayo observes, just “normal science.”
These observations are context for the global wave of competition policy attention that has been targeted at a handful of major players in what have been labelled “digital markets.” They are the oil, steel, and railroads of our day, and they are being subjected to intense scrutiny in multiple jurisdictions. The Biden Administration did not initiate, but it has surely joined and amplified that wave, and its legacy may be linked to the perceived accomplishments of its tech-focused enforcement agenda.
As Daniel Francis recounts in his contribution to this symposium, however, the antitrust enforcement agenda of the outgoing Administration, and to some degree its predecessor, has not been confined to any one industry. More broadly, it sought to ramp up enforcement of U.S. monopolization and merger law, and criminal enforcement. It also illuminated concerns for the competitive dynamics of agricultural and labor markets. And, as Francis also notes, despite some losses, government antitrust wins can serve as the basis for future public and private enforcement. Establishing precedent matters, as the extensive reliance on the 2001 Microsoft decision in many of the current briefs and decisions illustrates.
None of this suggests anything as dramatic as a “paradigm shift.” The more salient question is whether it represents a genuine, and durable, change of direction for U.S. antitrust policy. Whether the goal is to ramp up or ramp down, absent legislation it is difficult to move the needle in the short-term. This is especially true of programs that seek to increase or expand enforcement. New cases cannot be invented. Pipelines must be developed. Thoughtful investigations take time and enforcement actions must be fully litigated through appeal. Speeches, guidelines, and consent decrees can be short-lived.
Durable Change in Antitrust
Nearly every new administration in Washington seeks to place its imprimatur on antitrust policy. Winning the White House means winning the right to select the Attorney General, the Assistant Attorney General in charge of the Antitrust Division, and the Chair of the Federal Trade Commission. It can also create an opportunity to nominate new Commissioners and to establish budgetary priorities. Although the degree to which antitrust policy is an administration priority can vary, the domestic and global antitrust community watch with interest when these appointments are made on the assumption that they signal the direction of U.S. competition policy.
Even during periods of relative consensus, these choices can be consequential. New leadership almost invariably brings distinct themes and goals, if only in terms of emphasis. They may move quickly to declare revised or entirely new policies and priorities, emphasizing “more,” “less,” or simply different enforcement goals. Narratives that emphasize “consensus” and “continuity” may be invoked when new leadership perceives concern about its program. They may also signal sharp departure from immediate past policies, making major changes to its signature promise. In any event, “elections still matter,” even when a core consensus carries forward.
New federal agency heads have a variety of tools available to define and implement their programs. Although investigations and enforcement actions (or inactions) can be the most visible reflection of program priorities, amicus briefs, competition advocacy, speeches, policy statements, and guidelines are also available to express and imprint an administration’s goals on antitrust policy.
The last era of major change, one that still reverberates and has been the target of much of today’s harshest critics, is associated with the Reagan Administration and the ascent of the Chicago School. As Jonathan Baker has explained, like the Franklin Roosevelt Administration’s antitrust enforcement program, the Reagan Administration both reflected and ushered in a new political consensus, one that endured—at least in the White House—for 12 years counting the Reagan and George H.W. Bush Administrations. But in contrast to the Roosevelt Administration’s goal of ramping up antitrust enforcement, the Reagan Administration’s antitrust leadership sought to shift priorities and use its voice to encourage the courts to move in a less interventionist direction, overall.
Inertia is an obstacle to change. The Reagan Administration enjoyed unusually favorable historical circumstances that allowed it to overcome that inertia. It arrived in Washington following a sweeping election victory. It was also a time when a generational shift had already occurred at the Supreme Court. The Warren Court had given way to a new configuration with the appointments of four new justices by President Nixon (Chief Justice Burger and Associate Justices Blackmun, Powell and Rehnquist). President Ford’s sole appointee, John Paul Stevens, who was a recognized authority on antitrust, also became an important player in the Court’s antitrust decision-making. These justices were surely more conservative in their attitudes about government regulation of business generally, and antitrust in particular, but their collective decisions cannot be easily dismissed as the product of ideological shift.
The highly consequential 1976-77 term, which featured Sylvania, Brunswick, and Illinois Brick, was followed in 1978 by National Society of Professional Engineers and in 1979 by Broadcast Music, Inc. These decisions heralded not so much a “Chicago School” perspective, but a revival of the competitive-effects focus of the rule of reason as explained by Justice Brandeis in Chicago Board of Trade and, in Brunswick and Illinois Brick, some concern about the scope of antitrust law’s private right of action. Competitive effect was the cornerstone of these cases, and an assessment of competitive effect required consideration of a restraint’s purpose, nature, and effect. Sylvania and Professional Engineers also questioned over-reliance on per se prohibitions, and signaled receptivity to concerns for market power and efficiency justifications.
As I have previously written, there can be no doubt that the Reagan Administration’s antitrust program benefited from this change at the Court. It surely signaled a greater receptivity to efficiency justifications that resonated with Chicago School proponents, but it would be a distortion of the period to argue that these changes were brought about by Chicago alone.
The first and most prominent acts of William Baxter—Assistant Attorney General for Antitrust under Reagan—were to abandon the long-running IBM litigation, settle the AT&T litigation, and promulgate then largely innovative Horizontal Merger Guidelines, which were issued unilaterally by the Justice Department in 1982. As the Reagan Administration progressed, the Justice Department’s amicus program became an important tool that influenced the Supreme Court, often, but not always, by supporting defendants and urging the Court to adopt more demanding standards of proof.
The Board of Regents case deserves particular attention because it runs counter to stereotype. We now look back at it as the foundation of the “quick look” approach to the rule of reason, an approach that more readily shifts a burden to defendants when anticompetitive effects are “intuitively obvious.” It was largely the product of Republican antitrust enforcers. The amicus brief filed by the Justice Department reflected a concern for administrability, but not one that emphasized non-intervention. Rather, relying on the work of Phillip Areeda, it was designed to facilitate enforcement in cases that do not warrant “full” rule of reason analysis.
On the other hand, the Reagan Administration’s antitrust enforcers did not always command the support of all three branches. Two examples are worth highlighting. When the DOJ sought to persuade the Supreme Court to overrule Dr. Miles in Monsanto, Congress intervened and the DOJ relented at oral argument. Moreover, a major legislative proposal advocated by the Reagan Administration failed due to lack of support in Congress.
The Reagan Administration designed a strategy that included narrowing enforcement priorities, issuing supportive policy statements, and using an amicus program to urge the courts to move in the direction of more demanding burdens of proof, especially in private cases. Supportive speeches and policy statements were also important as was evangelizing its program.
In pursuing those priorities, the Reagan-Bush Administrations had some decided advantages. As noted, possession of political power is perhaps the most obvious of all conditions. But the durability of that power and of the program, itself, are also critical. The Reagan-Bush years also benefited from antitrust doctrine that was vulnerable to criticism for its overreach, a well-developed critique of that doctrine, and a tradition of flexibility in applying the Sherman Act, in particular, in the style of common law.
The courts proved to be receptive to non-interventionist and more business-friendly approaches to antitrust, but again, it is important to note that the Supreme Court changed in advance of the arrival of the Reagan administration and the ascendance of Chicago adherents to the agencies. And even then, it took years to embed new ideas in Supreme Court and lower court jurisprudence. The Reagan Administration sought to cement those gains with additional appointments not only to the Supreme Court, but to the lower courts.
Finally, the power of ideas to persuade can be critical. The Reagan Administration used a complete portfolio of initiatives that included guidelines, amicus briefs, speeches, and global advocacy. Although we look back at decisions of the Supreme Court as perhaps the most enduring of accomplishments, the 1982 Horizontal Merger Guidelines are among the most influential government policy pronouncements of the last fifty years. But they were not immediately accepted by the antitrust community and were not immediately and without exception accepted by the courts. But over time—decades—the Guidelines in their various iterations influenced competition enforcers around the world and ultimately the courts.
This ability to persuade reflects the power of the ideas they encapsulated and a growing consensus that grew up around them. Although they have been periodically revised and refined (sometimes in response to new court decisions, new developments in economic learning, and changing policy priorities), the Guidelines illustrate how ideas have always mattered in antitrust. This power to persuade is a cornerstone of durable change.
The Biden Administration’s antitrust program did not benefit from many of these facilitating preconditions for durable change. Catching a wave of reform that began before it took office, it instituted a wide range of initiatives that remain unfinished. Most obviously, as a one-term administration, its initiatives, including the 2023 Merger Guidelines, may be altered or abandoned when new leadership arrives. Its legacy has not been cemented and may depend on the success of the cases it brought and the power of its ideas. That is not to say that genuine progress was not been made in the pursuit of its goals. The “anti-monopoly” movement they advocated will remain part of the antitrust conversation.
A new Administration with different priorities might also present anti-monopoly movement supporters with opportunities to further develop and refine their critique of the current state of the law and any efforts to reverse their policies. And its prospects for a future return to political power might be improved if they are willing to find common ground with other antitrust reformers.
Conclusion
In 1982, then professor Frank Easterbrook was invited by the Texas Law Review to comment on articles authored by Professor Lawrence A. Sullivan and Sanford M. Litvack, who had recently stepped down as the Assistant Attorney General in charge of the Antitrust Division in the Carter Administration. Sullivan’s article provided a defense of vigorous enforcement of monopolization law; Litvack explained why, as head of the Antitrust Division, he continued to believe in enforcement of the per se prohibition of vertical resale price maintenance.
In response, Easterbrook asked “Is there a Ratchet in Antitrust Law?” He argued that antitrust law should not, like a ratchet, move solely in one direction. That, by its nature and design, the Sherman Act contemplated a common law process of evolution. That idea was not new. What was new in 1982 was Easterbrook’s argument that antitrust should not be confined to the pursuit of the same enforcement policies. For him, less was more.
Easterbrook’s “ratchet” metaphor is useful in our time and might just as well explain the efforts of the Biden Administration to significantly alter the course of antitrust. If there is no ratchet, antitrust can and surely will continue to adapt to changing times, changing industries, and new learning. It can expand and contract to meet the needs of the time as perceived and defined by its political and judicial leaders. That is not a paradigm shift; it is perhaps “the paradigm.”
Authors’ Disclosures: Professor Gavil is Senior of Counsel at Crowell & Moring LLP. The views expressed here are his own and do not reflect the views or interests of either the firm or Howard University. Neither has he received any financial support in connection with the preparation of this article.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
