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Roundtable Discussion Series on Competition & Deregulation 2018

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Roundtable Discussion Series on Competition & Deregulation 2018 Competition & Deregulation 1 Department of Justice Antitrust Division This report should be cited as: U.S. DEP’T OF JUSTICE, ROUNDTABLE DISCUSSION SERIES ON COMPETITION & DEREGULATION (2018). This report can be accessed electronically at http://www.justice.gov/atr/compreg/report. U.S. Department of Justice Antitrust Division Contributors and Participants: Makan Delrahim Assistant Attorney General Andrew C. Finch Principal Deputy Assistant Attorney General Roger P. Alford Deputy Assistant Attorney General Barry A. Nigro Deputy Assistant Attorney General William J. Rinner Acting Chief of Staff and Senior Counsel Rene I. Augustine Senior Counsel to the Assistant Attorney General John W. Elias Counsel to the Assistant Attorney General Julia A. Schiller Counsel to the Assistant Attorney General Robert A. Potter Section Chief, Competition Policy and Advocacy Section Daniel E. Haar Assistant Section Chief, Competition Policy and Advocacy Section Douglas B. Rathbun Attorney Advisor, Competition Policy and Advocacy Section John J. Martin Paralegal, Competition Policy and Advocacy Section Danielle Norgren-Markley Paralegal, Competition Policy and Advocacy Section Daniel J. Stone Paralegal, Competition Policy and Advocacy Section Emily C. Tifft Paralegal, Competition Policy and Advocacy Section Steven A. Webb Administrative Assistant, Competition Policy and Advocacy Section CONTENTS Introduction and Executive Summary ....................................... i Roundtable 1: Regulatory Exemptions & Immunities from the Antitrust Laws ...... 1 Agenda & Participant Biographies . ........................................ 2 Transcript of the Roundtable ............................................. 4 Participant Written Submissions The American Bar Association, Section of Antitrust Law – John Roberti ............ 34 The American Antitrust Institute – Diana Moss ............................ 46 Consumers Union – George Slover ...................................... 49 The Heritage Foundation – Alden Abbott .................................. 64 Open Markets Institute – Lina Khan ..................................... 68 The U.S. Chamber of Commerce – Craig Wolf .............................. 74 Roundtable 2: Antitrust Consent Decrees ................................... 77 Agenda & Participant Biographies ....................................... 78 Transcript of the Roundtable ............................................ 80 Participant Written Statements The American Bar Association, Section of Antitrust Law – Jonathan Jacobson ....... 116 The American Antitrust Institute – Diana Moss ........................... 130 The American Enterprise Institute – Jeffrey Eisenach ........................ 136 Consumers Union – George Slover ..................................... 143 Open Markets Institute – Brian Feldman ................................. 151 Public Knowledge – Meredith Rose ..................................... 162 The U.S. Chamber of Commerce – Sean Heather ............................ 164 Roundtable 3: The Consumer Costs of Anticompetitive Regulations ............. 169 Agenda & Participant Biographies ...................................... 170 Transcript of the Roundtable ........................................... 172 Participant Written Submissions The American Bar Association, Section of Antitrust Law – Thomas Zych .......... 214 The American Antitrust Institute – Richard Brunell ......................... 226 The Association of Corporate Counsel – Mary Blatch ........................ 230 The Cato Institute – Ryan Bourne ...................................... 234 Consumers Union – George Slover ..................................... 245 The National Diversity Coalition – Steven Sugarman ........................ 253 Open Markets Institute – Lina Khan .................................... 256 Public Knowledge – John Bergmayer .................................... 262 Center for Technology, Innovation and Competition – Christopher Yoo ............ 269 The U.S. Chamber of Commerce – Sean Heather ............................ 278 i Introduction and Executive Summary The Roundtable Discussion Series on Competition and Deregulation provided an opportunity for the Antitrust Division to consider a wide variety of perspectives as it assesses harm to competition from many forms of regulation.1 The insights gained from the roundtables will better equip the Division in its efforts to adopt and advocate for policies that remove impediments to free-market competition and, in turn, minimize harm to American consumers. The Series brought together leading thinkers from a range of legal and advocacy organizations across the policy spectrum. It consisted of three roundtable discussions linked together by the premise that proper antitrust enforcement allows markets to thrive while requiring less regulatory intervention. Markets are best governed by competition, rather than by rules of conduct crafted and enforced by regulators, which often may be inefficient, outdated, and unresponsive to consumer demands. Prior to serving as a distinguished Associate Justice on the U.S. Supreme Court, Robert Jackson made this point in 1937 when he gave a speech as the Assistant Attorney General for the Antitrust Division. He said: “The antitrust laws represent an effort to avoid detailed government regulation of business by keeping competition in control of prices. It was hoped to ... let [government] confine its responsibility to seeing that a true competitive economy functions.”2 This, he said, “is the lowest degree of government control that business can expect.”3 This approach reflects a fundamental choice in the relationship between government and the economy. While some economies are centrally planned and others are highly regulated, in the United States our economy is premised on liberty. In the United States, through the give and take of the free market, the competitive process maximizes consumer welfare by favoring efficiency, innovation, choice and lower prices to the consumer. The ideal of the free market is precisely what the antitrust laws were designed to protect. As Justice Black wrote in Northern Pacific4, the Sherman Act is a “comprehensive charter of economic liberty,” and antitrust enforcement “rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality, and the greatest material progress.”5 The focus on economic liberty and consumer welfare serves our most cherished values. The economic liberty approach to industrial organization is also sound economic policy for a free nation. F. A. Hayek won the 1974 Nobel Prize in economics for his work on the problems of central planning and the benefits of a decentralized free market system. The price system of the 1 Participating organizations included: The American Antitrust Institute, the American Bar Association, Section of Antitrust Law, the American Enterprise Institution, the Association of Corporate Counsel, the Cato Institute, Consumers Union, the Heritage Foundation, the National Diversity Coalition, the Open Markets Institute, Public Knowledge, and the United States Chamber of Commerce. 2 Robert H. Jackson, Assistant Att’y Gen., Antitrust Div., Dep’t of Justice, Should the Antitrust Laws be Revised?, Address Before the Trade and Commerce Bar Association and Trade Association Executives (Sept. 17, 1937), in 71 U.S.L. REV. 575, 576 (1937), https://www.roberthjackson.org/speech-and- writing/should-the-antitrust-laws-be-revised. 3 Id. 4 N. Pac. Rwy. Co. v. United States, 356 U.S. 1 (1958). 5 Id. at 4. ii free market, he explained, operates as a mechanism that communicates diffuse information held by consumers and businesses throughout the economy.6 He also explained that “[i]f we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances.”7 Economic regulation, by contrast, often handcuffs the free market’s invisible hand. It introduces a decision maker who cannot possibly account for the wealth of information and dynamism that the free market incorporates. The Heritage Foundation, represented by Alden Abbot on the first roundtable, noted that regulation “is a breeding ground for anticompetitive activity,” adding that “complex regulatory schemes, even when entirely well-intentioned, may seriously distort the competitive process.” Broad, bipartisan agreement has emerged over the past several decades that consumer welfare is the ultimate goal of the antitrust laws. Antitrust seeks to protect the competitive process to maximize consumer welfare, and it relies on economic analysis to effectively serve that goal. In so doing, it minimizes the need for regulatory intervention on issues of price, quality, choice, and investment. The roundtables demonstrated an increasing consensus that timely and vigorous antitrust enforcement plays an important role in building a less regulated economy in which innovation and business can thrive, and ultimately the American consumer can benefit. Diana Moss, President of the American Antitrust Institute (AAI) noted during the first roundtable that while “there’s a little bit of a tension in the consumer community, favoring certain types of regulatory approaches to achieve certain goals,” AAI, echoed by other consumer perspectives, eagerly took the side of being “advocates
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