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3 - Enforcement

Published online by Cambridge University Press:  12 November 2009

Keith N. Hylton
Affiliation:
Boston University
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Summary

Enforcement of the federal antitrust laws occurs through the actions of government agencies and the lawsuits of private parties. In this chapter, I set out the mechanics of these enforcement processes and consider whether the level of enforcement is optimal from an economic perspective. I also examine some predictability and fairness issues generated by the current enforcement framework.

If the antitrust laws were designed to provide the socially optimal level of deterrence, then they would discourage only those acts that reduce society's wealth. I will say that the antitrust laws overdeter if they discourage conduct that on balance increases society's wealth. Similarly, I will say that the laws underdeter if they fail to discourage conduct that reduces society's wealth.

I conclude, in this chapter, that the penalty provisions and the rules governing damages, when viewed in isolation, are likely to underdeter covert anticompetitive activity, such as price-fixing. However, it is difficult to say whether the antitrust laws, viewed in their entirety, underdeter or overdeter. The overall picture is complicated, because while some features of the enforcement structure suggest the laws underdeter, other features suggest the laws may overdeter.

OPTIMAL ENFORCEMENT THEORY

Assume that the objective of the antitrust laws is to maximize consumer welfare. What is the appropriate fine for an antitrust violation? That question received its clearest answer in an article by William Landes, who relied on the enforcement theory of Gary Becker.

Type
Chapter
Information
Antitrust Law
Economic Theory and Common Law Evolution
, pp. 43 - 67
Publisher: Cambridge University Press
Print publication year: 2003

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  • Enforcement
  • Keith N. Hylton, Boston University
  • Book: Antitrust Law
  • Online publication: 12 November 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511610158.004
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  • Enforcement
  • Keith N. Hylton, Boston University
  • Book: Antitrust Law
  • Online publication: 12 November 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511610158.004
Available formats
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Send book to Google Drive

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive.

  • Enforcement
  • Keith N. Hylton, Boston University
  • Book: Antitrust Law
  • Online publication: 12 November 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511610158.004
Available formats
×