Harmonization of antitrust enforcement | Regulation overview

From Aesop’s Fables comes the timeless warning: “United we stand, divided we fall.”

According to one researcher, antitrust law is not immune to this cautionary tale.

In a recent article, Christine P. Bartholomew, a professor at the University at Buffalo School of Law, argues that antitrust enforcement agencies are mired in an ecosystem of hostility and infighting. Bartholomew argues that without increased cooperation and unity among antitrust enforcers, antitrust laws will continue to suffer, exposing the American public to harms that stifle competition in markets.

Bartholomew identifies two specific steps in the antitrust ecosystem that enforcement agencies can take to achieve harmony: adopting guiding principles and establishing a working group that includes all enforcement agencies.

Bartłomiej notes two camps of enforcement: public and private. The executive body on the public side exercises power in both the federal and state government structures.

Two agencies – the Federal Trade Commission (FTC) and the U.S. Department of Justice – bear the federal government’s enforcement burden. In states, attorneys general and state antitrust agencies enforce both state and federal antitrust laws.

Consumers, who often join together in class actions, dominate the private enforcement arena, notes Bartholomew. Bartholomew argues that because of the costs of litigation and limited recovery options, Congress has provided effective monetary incentives to private enforcement agencies to encourage summary prosecutions.

Federal antitrust law allows multiple enforcement agencies – public and private, state and federal – to simultaneously pursue and deter violators. Bartholomew states that Congress designed overlapping private and public law enforcement authorities to maximize oversight.

This “belt and suspenders approach” is an intentional and beneficial dissipation of power, Bartholomew explains. In her opinion, equalizing and overlapping public and private enforcement increases the flexibility of antitrust laws.

Bartholomew suggests that this overlap in law enforcement compensates for resource constraints, removes errors and information problems, and fuels healthy competition among law enforcement agencies. At a fundamental level, this overlap keeps healthy markets from getting sick because redundancy increases overall reliability, Bartholomew argues.

Bartłomiej warns that without robust antitrust enforcement, the benefits of the law – from competitive pricing to innovation – could disappear. In her view, the prospect of over-enforcement or double recovery is false because no enforcement authority can repeat the redress.

Bartholomew states that “no single enforcement authority can and does not assume a country’s full responsibility for antitrust enforcement.” Each enforcement authority has inherent limitations, such as the risk of being taken over by DOJ regulators and the inability to obtain monetary damages from the FTC.

All public law enforcement agencies face budget constraints as funding fluctuates with administrative changes. Even private law enforcement agencies are struggling with rising procedural barriers to litigation, which has led to an overall decline in lawsuits, Bartholomew notes.

Bartholomew concludes that these structural and environmental conditions meant that no single authority had the time, capacity or resources to oversee the entire economy. Bartholomew notes, however, that instead of solving collective problems as planned, law enforcement agencies have turned on each other.

Bartholomew examines executive infighting, focusing on the Department of Justice, to identify concerted actions that harm the benefits of simultaneous law enforcement.

First, it highlights the Justice Department’s public support of other law enforcement agencies’ cases – whether it supports a co-financer or a defendant – as evidence of the agency’s belief that it is the authoritative interpreter of antitrust law. By crossing the boundaries of prohibited power, these interventions reveal a “presumption of primacy,” Bartłomiej argues. He concludes that these repeated challenges to enforcement entities serve the anti-gun regulatory purposes of generally reducing competition surveillance.

Second, Bartholomew maintains that the Justice Department has transformed “from a champion to a challenger” for private enforcement agencies and has attacked class action lawsuits in general. Bartholomew notes that if private enforcement were weakened, there would be a vacuum in the antitrust ecosystem that would last forever.

Finally, the Department of Justice has begun applying long-term suspensions, which pause private enforcement actions, in parallel civil cases. These stays jeopardize the prospects of compensation for victims and weaken the integrity of the evidence, Bartłomiej notes. He argues that the Justice Department has other, less intrusive procedural tools than stays, but opposes their use.

Bartholomew urges regulators to minimize conflict and proposes a set of flexible guiding principles to help achieve harmony among enforcement agencies: leveraging the benefits of multiple enforcers, avoiding mission drift, and sharing enforcement powers.

Bartholomew acknowledges that some level of disagreement between co-performers is inevitable and even productive because it prevents groupthink and encourages healthy competition. But it warns that the current level of litigation poses an “existential threat” to the law enforcement ecosystem.

By disrupting each other’s work, each executive loses the benefits of coordination, such as information exchange and expertise, and instead exhausts each other’s limited resources. Instead of non-interference, Bartholomew proposes expecting law enforcement agencies to cooperate on litigation strategies whenever possible to minimize costs and leverage the inherent strengths of each law enforcement agency.

Moreover, Bartholomew urges all enforcement agencies to return to the beating heart of antitrust law – maximizing deterrence and compensation for victims – to avoid deviating from their mission. If enforcement agencies lose sight of these goals, they may waste resources and even enable regulatory capture, he argues. Bartholomew emphasizes that reorienting the executive branch towards law enforcement is at the heart of preventing mission drift.

It also suggests that law enforcement agencies should “share the enforcement path” and avoid judicial procedures that would halt or hinder co-enforcement. By refraining from unnecessary stays and opposing orders, officers can avoid blocking each other’s actions, Bartłomiej argues.

To facilitate and strengthen these principles, Bartholomew recommends the creation of a “U.S. Antitrust Enforcement Task Force” composed of equal representatives from the FTC, the Department of Justice, state attorneys general, and the private enforcement bar.

Bartholomew argues that creating this group would provide a marketplace for antitrust ideas to flow and respect and trust to flourish. Moreover, this institution would contribute to the development of interdependence and communication, while avoiding harmful public disputes that weaken jointly controlling entities, he notes.

Bartholomew emphasizes that guiding principles, combined with a working group, can alleviate dissonance among law enforcement agencies and ensure that law enforcement is “greater than the sum of its parts.” Without cooperation and unity, divisions will continue to undermine competitive oversight and leave the American public more vulnerable than ever, Bartholomew concludes.