By Richard B. Steuer (New York)

Early this year the head of the Antitrust Division of the U.S. Department of Justice wrote to the Congressionally-convened Antitrust Modernization Commission with suggestions for topics for the Commission to study. The letter is only three and a half pages long, but provides some revealing insights into the philosophy behind the Administration’s likely agenda for antitrust reform over the next four years. (The letter is available on the Justice Department’s website, at http://www.usdoj.gov/atr/public/207122.htm).

The letter makes nine points:

  1. A panel of experts, including some who do not make a living in antitrust, should evaluate the effects of antitrust enforcement on the economy.

  2. Outright repeal of the Robinson-Patman Act should be considered.

  3. Introduction of civil fines – as distinguished from today’s criminal fines and private civil damages – should be considered to fill in enforcement gaps where anticompetitive conduct is not criminal and private damages are not recoverable.

  4. Consideration should be given to limiting treble damages to cartel cases (i.e., those involving price fixing, output restrictions or market division among competitors), because the other antitrust offenses are less well defined.

  5. Certain antitrust immunities and exemptions should be candidates for repeal.

  6. Elimination of the right of individual states to pursue antitrust matters that effect more than one state should be considered.

  7. State action immunity should be narrowed.

  8. Preemption of state Illinois Brick repealer statutes – which allow indirect purchasers to recover under state antitrust law in about half the states – should be considered.

  9. The Sherman Act itself should not be rewritten, since a new and never-before-interpreted antitrust statute would be counterproductive even if well intentioned.

What does this mean in practical terms right now?

  1. The Justice Department is not likely to push the envelope of antitrust enforcement, to ensure that it does not do more harm to the economy than good. Over the past four years, the Administration has been criticized for some of the cases it has initiated.

  2. The Robinson-Patman Act will not be enforced by the Justice Department (which is not news, since the Department has not been in the Robinson-Patman business for years) and also is not likely to get much attention within the Federal Trade Commission (which now has a majority of Republican commissioners).

  3. The Government will look for more mechanisms to exact payments from wrongdoers, even if private victims are not in a position to prove damages.

  4. Congress may be asked to "de-treble" antitrust damages, except for hardcore price fixing and other cartel activity.

  5. Special Congressionally-created immunities, including those for ocean shippers and export groups, may be in peril.

  6. Congress may be asked to limit a state’s ability to challenge conduct or a merger that effects more than one state, but this proposal is likely to encounter stiff opposition and may have only limited impact even if adopted since many state initiatives today already are coordinated through multi-state task forces.

  7. State action immunity has been under assault by federal enforcers, including both the Justice Department and the Federal Trade Commission, for years. However, both the states and the private firms that enjoy the benefits of state franchises can be expected to resist any effort to make this immunity harder to invoke.

  8. Preemption of state Illinois Brick repealer laws also has been suggested before, and is likely to provoke considerable controversy over federalism if seriously pursued.

  9. As for re-writing America’s competition laws (perhaps to make them more harmonious with those of other nations), this is not going to happen.

Congress may be ready to take a hard look at antitrust litigation and the substantive antitrust rules this term, and the Justice Department’s proposals provide the most current insights into the legislative agenda that the Administration is likely to pursue. How much actually will change remains to be seen, but if these changes ever are to come, their time may well be now.

Copyright © 2007, Mayer, Brown, Rowe & Maw LLP. and/or Mayer Brown International LLP. This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

Mayer Brown is a combination of two limited liability partnerships: one named Mayer Brown LLP, established in Illinois, USA; and one named Mayer Brown International LLP, incorporated in England.