Robert Bork, in his book The Antitrust Paradox; A Policy at War With Itself, suggests that “to abandon economic theory is to abandon the possibility of a rational antitrust law.” Judge Bork’s observation was made in 1978, but the antitrust war goes on with unabated intensity even today. Regulators in the United States, Europe, and many other jurisdictions see-saw back and forth with ever-changing formulas of what is or is not permissible commercial activity. Companies are urged to engage in vigorous competition, but when a large market share is acquired as a result of such competition, regulatory action soon follows. Thus, the paradox.
Take for instance the United States Court of Appeals for the District of Columbia Circuit ruling in United States v. Microsoft written in 2001. Mr. Liebeler filed an amicus brief on behalf of the Computing Technology Industry Association. The Court found that the government’s allegations that Microsoft’s inclusion of Internet Explorer within the Windows Operating system was not a per se violation of the Sherman Act, but instead should be judged under the rule of reason. Truly a victory for rational economic theory.
But, then in 2007 the European Court of First Instance affirmed a European Commission ruling finding that Microsoft’s inclusion of Windows Media Player within the Operating System was a clear violation of European antitrust law. Mr. Liebeler filed an intervener brief in this case as well arguing that there was no economic foreclosure of other products and thus no consumer harm. The result, however, was diametrically opposed to the 2001 D.C. Circuit Court ruling. No economic analysis was considered.
It is difficult to reconcile these divergent outcomes. It is easy to say that there is a difference between U.S. and European Law on critical points, but antitrust enforcement policy also takes strange directional lurches when new administrations are in place. Market leaders are constantly guessing as to what conduct may draw attention from antitrust regulators.
For over ten years Lars Liebeler has been at the cutting edge of U.S. and European antitrust law through its representation of the Computing Technology Industry Association. The firm has filed amicus briefs and intervener statements in the United States Court of Appeals for the Federal and District of Columbia Circuits, and with the European Commission and the European Court of First Instance. Lars Liebeler testified as an expert witness before the Court of First Instance and has written extensively on the state of antitrust law in the high tech industry. The fundamental guidepost for this advocacy has been Judge Bork’s simple precept: without the application of rigorous economic analysis, antitrust is nothing more than formalistic line drawing.
Many high-tech firms, including Microsoft and Intel, have been accused of monopolization, or the European equivalent, abuse of a dominant position.
The bedrock principle of antitrust law is that regulatory enforcement must advance the interests of consumers. The protection and enhancement of consumer welfare is the goal of antitrust law.
Protecting competitors in the marketplace from the natural effects of competition, or penalizing market leaders based on large market share is not a valid goal of antitrust law.
Lars Liebeler PC provides advocacy and policy guidance to high tech industry firms with antitrust concerns.
Each time someone stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope.
ROBERT F. KENNEDY