ON-TOPIC: UNITED-STATES - ANTITRUST POLICY – PRESIDENTIAL ELECTION - MERGERS - CARTELS - MONOPOLIZATION - INTERNATIONAL COOPERATION - EUROPEAN UNION
The
contributions below are part of a set of short articles on the future of
the antitrust policy in the United States under the upcoming Trump
Administration. The two featured contributions are provided free of
charge. Access to the other contributions is for Concurrences Review
subscribers.- A preliminary view, Christopher J. Meyers
- Fasten your seat belts: Here comes the Trump Administration, John DeQ. Briggs
- Refections on the next four years of antitrust enforcement, Donald C. Klawiter
- A strong competition policy prescription for a new U.S. Administration, Alden F. Abbott
- The tea leaves say: Back to the future for antitrust enforcement, Jim Tierney
- Toward a counter-reformation for antitrust, Albert A. Foer
- The Antitrust agenda of a billionaire populist President, Michael L. Weiner
- Antitrust in a Trump Administration: A call for continuity, Logan M. Breed, Janet L. McDavid
- Antitrust and the new Administration: An international perspective and the importance of due process, Alvaro Ramos, Richard Taffet
- Antitrust enforcement in the United States: A look ahead, Aidan Synnott
- The future of antitrust policy from an in-house perspective, Sharis Pozen, Mark Whitener
- Resetting merger policy in the new Administration, Joseph Farrell, John Kwoka, Neal F. Finnegan
- Antitrust in the Trump Administration, Scott Sher, Ben Labow, Bradley Tennis
- The need to revise the U.S. non-horizontal merger guidelines, James Langenfeld
- A holistic assessment of dynamic competition, William H. Rooney, Agathe Richard
- Pharmaceutical antitrust: What the Trump Administration can do, Michael A. Carrier
- Antitrust enforcement in the United States and Europe, Michael D. Hausfeld, Michael P. Lehmann, Bonny Sweeney
A preliminary view
Christopher J. Meyers
Associate General Counsel, Microsoft Corporation, Redmond Washington
1. Our world feels like it is changing at an unprecedented rate. Those rapid changes have created radical shifts in how we view it. Particularly for the United States, which long played the role of undisputed global leader, this new world order is generating deep anxiety, for its citizens and the country. Why do we face such income inequality? What do we do about the shrinking middle class? Is our form of democracy captured and ineffective? Is globalism good or bad, and is it inevitable either way? Has capitalism failed? These questions prey on us daily. The unsatisfying answers to many of these questions are the reason for the increase in populism and nationalism in the U.S.—and elsewhere—and for an election season like no other in memory. As the U.S. moves forward under a Trump Administration, how can we expect antitrust enforcement to play a role, and what role should it play?
2. There are no clear indications regarding the direction U.S. enforcement will take. Unlike the Democratic Party platform and candidate, we have seen no specific antitrust platform or public policy statements to divine how president-elect Trump will make appointments and prioritize the agencies. But we can expect there will be pressure, as always, to use the tools of antitrust to remedy broader policy issues.
3. For decades, U.S. antitrust law and enforcement has focused on preserving the competitive process to encourage innovation and price competition. When looking at the U.S. tech industry, we can clearly say the industry overall is functioning well on both fronts. We have lived through a period with enormous, impactful innovation, from which everyone in America truly has benefited. The power of devices—with a mobile phone in every person’s pocket—and the services that accompany them have democratized technology and disseminated information and services across the globe. And, while it faces strong and increasing competition from other regions, the U.S. currently leads the world in technology innovation.
4. To the extent the next administration wants to ensure America remains strong, it would be ill-advised to hobble that economic tech engine and provide an edge to others. With respect to the technology industry, one would expect enforcement to focus on the core antitrust policies that lead to this growth and consumer benefit in the first place: encouraging innovation and investment, and limited intervention in markets that are functioning well. It would be highly surprising to see new policies and enforcement that attack the U.S. technology industry, which has created so many U.S. jobs and presents great future opportunity.
5. On the other side, one hopes the new administration resists expanding antitrust policy to achieve goals beyond preserving competition and innovation, including protectionism. In international competition law regimes today, we see some jurisdictions reaching beyond typical theories of antitrust harm based on economic analysis, and inserting other policy goals into their substantive law and enforcement. To the extent more than 100 independent antitrust regimes were to see the U.S. expand its antitrust approach with unconstrained policies, we can expect—and have no standing to object—all of those regimes to adopt and apply disparate and unpredictable policies too. The achievements obtained in recent years by groups like the International Competition Network and OECD in advancing greater alignment and best practices globally would be undone quickly. For example, if antitrust enforcement in the U.S. specially targets foreign firms and makes it more difficult for them to compete in the U.S., we will see the same from other countries, making it harder for U.S. firms to operate in those markets. That type of antitrust "arms race" would hurt U.S. firms and U.S. jobs. Most importantly, the U.S. needs to be a principled leader in antitrust enforcement, and encourage others to do the same. Policy issues outside of competition law should be addressed outside of that law, through the appropriate mechanisms, whether legislative, trade, or otherwise.
6. Another highly relevant issue the next administration will need to consider is whether industries in the U.S. are now overly consolidated. As we see consolidation in many industries and opposition to those tie-ups, this has become an increasingly hot topic not only for antitrust practitioners but for the average person on the street. Such consolidation can, of course, be a double-edged sword: consumers may enjoy the low prices that scale efficiencies can bring, but resist the idea that they have less choice of where they buy goods and services.
7. Turning again to the tech industry, this type of horizontal consolidation through acquisition is relatively uncommon. Instead, the typical tech deal involves firms making acquisitions to add complementary capabilities that can result in new products, services and innovation that would be unachievable standalone. These vertical deals are generally pro-competitive, and it is likely the next administration would continue to recognize that reality.
8. Of special importance, much of the innovation we see in the tech space is driven by start-ups that do not necessarily have a sustainable standalone business model, but spend time investing in creative new ideas knowing that other companies may be interested in acquiring that business and technology to offer it with their own. To the extent the next administration seeks to adjust the balance on merger enforcement, whether in the horizontal realm or in a revisit of the U.S. vertical guidelines, it should do so with this in mind and not apply a broad brush to all deals in all industries. Every industry and combination is different, and the benefits and potential loss of competition that may result from each should be assessed on a case by case basis. In tech, if you want entrepreneurs investing in new businesses and start-ups—one of the key themes we heard throughout the presidential campaign—this macro point is critically important.
9. Finally, as to cartels, enforcement should remain as strong as ever. As others have noted, the president-elect has made public statements in the past criticizing global cartels. The U.S. has been active in uncovering and challenging cartels regardless of where they exist if they harm U.S. consumers. We should be assured that this lack of tolerance for pricing collusion and coordination will persist, if not strengthen. That priority needs to remain at the center of antitrust enforcement globally, as it is absolutely necessary to preserving the competitive process and reaping the benefits of competition.
10. Whatever direction enforcement policy takes, the fact the U.S. is a rule of law country will place limits on how far and fast any new enforcement could go. That rule of law ensures we will smoothly transition to a new president, and it ensures that all new executive administrations face checks and balances. As we know, the U.S. antitrust system built around the Sherman and Clayton Acts adopts a common-law approach. In the 105 years since the Standard Oil decision, the Supreme Court and lower courts have ruled on thousands of cases that comprise the lexicon of U.S. antitrust law. Under the U.S. system, the executive branch influences and moves that law based on the cases that are brought, but the ultimate outcomes are not left to the discretion and decision of enforcers. An independent judicial process operates as the trier of fact and interpreter of law. That process usually leads to incremental adjustment in the law. It is the rare decision, usually from the highest court, the U.S. Supreme Court, that reverses the law on a given point. And those decisions are often the final result of years of lower court decisions and advancement of the law. Regardless of the goals and direction the agencies themselves adopt in a new administration, they must still prove their cases in court and under the law. We should not expect dramatic and rapid changes in outcomes, even if we do see radical shifts in any given area of enforcement activity.
No comments:
Post a Comment