- The decline in cases brought by the Department of Justice since the 1970s is consistent with the story of Chicago School influence over antitrust. What is perhaps less well known, but clearly reflected in the data, is that the Chicago Revolution took place in the Ford, and especially the Carter, Administrations, not, as is sometimes supposed, in the Reagan Administration, although Reagan supplied the coup de grace.
Indeed, we have only five monopolization cases filed by DOJ over the course of the entire Carter Administration, as compared with 58 filed during the part of the Nixon Administration and the Ford Administration covered by this data series. This is consistent with the broader influence of the Chicago School over regulation of business. It was also under Ford and Carter, not Reagan, that deregulation got underway, with partial deregulation of railroads (1976), near-complete deregulation of airlines (1978), and partial deregulation of trucking (1980) (more here).
The timing suggests that the Chicago School’s victories were intellectual, rather than merely partisan. As Przemyslaw Palka has pointed out to me, Milton Friedman consciously pursued a strategy of intellectual, rather than political warfare, because he understood that victory on the intellectual plane is more complete and enduring (a nice discussion of this may be found here on pages 218-221). As these numbers suggest, Chicago prevailed by converting its adversaries, so that even when its adversaries were nominally in political power under Carter, they implemented Chicago’s own agenda.
- To the extent that the early part of the FTC data series is reliable (more on that below), the story in the FTC case numbers is that of the six monopolization cases brought over the past five years, following a twenty-year period during which the FTC brought only three cases. With the exception of Google, which has just been filed, there has been no corresponding uptick in monopolization cases filed by the Department of Justice.
- The private litigation data show that in some years (1998 and 2013), private litigation across the entire United States has produced fewer monopolization cases (against unique defendants) than did a single federal enforcer–the DOJ–in 1971. The private litigation numbers for 1997 to 2020 also show that, on average, about twenty defendants face new monopolization actions each year when federal enforcers are filing near-zero complaints. To the extent that the numbers for 1974 to 1983 are reliable (of which more below), they suggest that private cases have also declined markedly since the 1970s, although there was a lag of several years between the two effects, perhaps due to the tendency of private plaintiffs to file follow-on cases to government cases.
- Altogether, one is left with the impression that corporate America has been awfully well-behaved since about 1975.
Notes on the Data:
- The cases brought by the Department of Justice (DOJ) come from the Antitrust Division’s own workload statistics, so I assume the numbers are accurate. For DOJ cases investigated, as well as filed, see here.
- The cases filed by private plaintiffs come from two sources. The first, for the years 1997 to 2020, is a search for Section 2 complaints in federal court dockets via Lexis CourtLink. I must thank Beau Steenken, Instructional Services Librarian & Associate Professor of Legal Research at University of Kentucky Rosenberg College of Law, for figuring out how to search CourtLink for Section 2 cases (no easy task, it turns out).
These are only cases for which the plaintiff, in filing the complaint, indicated the cause of action as Section 2 of the Sherman Act in the court’s cover sheet. Apart from deleting a few cases in which DOJ was the plaintiff, and a few cases in which the case was filed by mistake (e.g., the case name reads: “error”), I did not examine these cases at all, other than to note that many of the defendants look plausible (e.g., Microsoft comes up a lot in the late 1990s or early 2000s).
Finally, I counted only unique defendants in any given year. So for example, if there were ten cases filed against Microsoft in 2000, I counted that as only one case. The reason is that multiple consumers or competitors might be harmed by a single piece of anticompetitive conduct undertaken by a monopolist, and so one would expect multiple plaintiffs to sue the monopolist based on the same conduct. For those interested in using case counts to measure enforcement, all of those cases signal the same thing, that a particular anticompetitive practice has been challenged, and so all of the cases together really only represent a single instance of enforcement. I did not, however, check each complaint to make sure that the alleged conduct was the same across all complaints. I just assumed that multiple complaints filed in a given year against a single defendant relate to the same conduct. (I did not, however, count unique defendants across plaintiff types: the Justice Department case against Microsoft was counted toward DOJ cases and and any private cases filed against Microsoft in the same year count as a an additional single case in the private cases account.)
According to CourtLink, some federal courts adopted online filing later than others, and CourtLink only has electronic dockets. I chose to use 1997 as the start year for this count, because by that year almost all jurisdictions were online and so presumably their dockets are part of the CourtLink database. According to CourtLink, several jurisdictions had not yet moved online by that year, however, and so the counts may be slightly skewed low in the first few years after 1997 because they miss cases filed in the jurisdictions that were still offline during that period. The jurisdictions that went online after January 1, 1997, and the year in which they went online, are District of New Mexico (1998), District of Nevada (1999), and District of Alaska (2004).
The source of the data for the years 1974 to 1983 is Table 6 in this article. That table gives the yearly percentage of refusal to deal and predatory pricing cases in a sample of 2,357 cases from five courts, Southern District of New York, Northern District of Illinois, Northern District of California, Western District of Missouri, and Northern District of Georgia, as well as the total number of private antitrust cases filed per year. Because I suspect that my CourtLink data represents “pure” Section 2 cases–cases in which the Section 2 claim is the principal claim in the case–I adjusted these percentages using information from Table 1 in the paper about the share of those percentages that represent primary claims. Because the total yearly private cases given in the Article did not appear to be adjusted for multiple cases filed against the same defendant in a given year, as I adjusted the CourtLink data, I therefore further reduced the results in the same proportion as my CourtLink results were reduced when I eliminated multiple cases against the same defendant, a reduction of about 40%.
- I collected the FTC data by searching for cases labeled “Single-Firm Conduct” in the FTC’s “cases and proceedings” database. The cases and proceedings database goes back to 1996, and so I labeled years for which there were no hits as years of zero cases going back to 1996. However, the FTC website does caution that some older cases are searchable only by name and year, and presumably not by case type, so it is possible that this data fails to count cases from early in the period (e.g., late 1990s). I also paged through the “Annual Antitrust Enforcement Activities Reports” issued by the FTC between 1996 and 2008 and found a couple of cases not returned by the search of the cases and proceedings database. Finally, I included the FTC’s case against Intel, filed in 2009. I counted both administrative complaints filed in the FTC’s own internal adjudication system and complaints filed by the FTC in federal court. The FTC cases are nominally brought under Section 5 of the FTC Act, through which the FTC enforces Section 2 of the Sherman Act.