POLITICS AND PARTISANSHIP IN U.S. FEDERAL ANTITRUST ENFORCEMENT WILLIAM E. KOVACIC* U.S. antitrust law provides an informative context in which to examine what guides the behavior of regulatory agencies. Congress cast the federal antitrust statutes in broad terms1 and gave the Department of Justice and Fed- eral Trade Commission much latitude to decide what conduct to proscribe and how to remedy infringements. The interest in predicting how the DOJ and the FTC will use their authority reflects the formidable capacity of federal anti- trust enforcement to affect individual firms and entire industries. Modern experience illustrates the magnitude of enforcement discretion in the U.S. antitrust system. In a number of areas, the DOJ and the FTC have adjusted enforcement priorities significantly over time. For example, in the 1960s and 1970s, distribution practices were core elements of FTC antitrust enforcement.2 Since the late 1980s, however, the FTC has brought just two Robinson-Patman Act3 cases, and the Commission has initiated no vertical * Global Competition Professor of Law and Policy, George Washington University Law School; Non-Executive Director, United Kingdom Competition and Markets Authority. The au- thor served as a commissioner with the Federal Trade Commission from 2006–2011 and chaired the agency from March 2008 to March 2009. The author is grateful to David Hyman, Marina Lao, Jon Leibowitz, James Rill, Steven Salop, and Ted Voorhees for many informative discus- sions. The author also thanks Nathan Wilson for his excellent editorial guidance. The views expressed here are the author’s alone. 1 Section 1 of the Sherman Act prohibits agreements in “restraint of trade.” 15 U.S.C. § 1. Section 2 of the Sherman Act sanctions firms that “monopolize” or “attempt to monopolize.” 15 U.S.C. § 2. Section 7 of the Clayton Act bans transactions whose effect “may be substantially to lessen competition, or to tend to create a monopoly.” 15 U.S.C. § 18. Section 5 of the Federal Trade Commission Act condemns “unfair methods of competition.” 15 U.S.C. § 45. The statutes do not define these terms. 2 Data on these trends are summarized in William E. Kovacic, The Modern Evolution of U.S. Competition Policy Enforcement Norms, 71 ANTITRUST L.J. 377, 411 (2003) [hereinafter Kovacic, Modern Evolution]. From 1961 through 1968, the FTC brought over 500 Robinson- Patman Act (RP) cases. If closely-related cases are counted as one matter, the number of FTC Robinson-Patman cases filed in this period is 134. Id. From 1970 through 1979, the FTC brought 74 vertical restraints cases. Id. 3 15 U.S.C. §§ 13–13a. 687 79 Antitrust Law Journal No. 2 (2014). Copyright 2014 American Bar Association. Reproduced by permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. 688 ANTITRUST LAW JOURNAL [Vol. 79 restraints matters since 2000.4 The DOJ brought Sherman Act criminal charges to challenge single-firm conduct as late as the mid-1960s,5 but DOJ criminal enforcement has focused exclusively on horizontal restraints since the early 1980s.6 From 1993 through 2000, the DOJ brought seven civil cases predicated mainly on alleged Sherman Act Section 2 violations.7 Since 2000, the department has filed one such case.8 What accounts for these and other notable variations in federal enforcement activity? One common explanation is “politics”9—a shorthand expression for the capacity of elections and elected officials to bend the antitrust enforce- ment system to serve a set of policy preferences or constituent desires. By this view, the political process affects enforcement through presidential elections, the selection of agency leadership, the intervention of executive branch and congressional officials in routine agency decision making, and the appoint- ment of federal judges who hear antitrust cases. It is unsurprising that a regulatory system rich in power and prosecutorial discretion would have some connection to the political process. The substan- tial economic significance of the statutes whose enforcement is entrusted to the DOJ and the FTC ensures that elected officials will study what these agen- cies do and sometimes seek to influence the exercise of their prosecutorial authority. It is also difficult to imagine that a nation would give significant responsibility to law enforcement bodies without some means for elected offi- cials to hold agency officials to account for their policy choices. Expansive grants of authority tend to come with accountability strings attached.10 4 The most recent FTC Robinson-Patman case is McCormick & Co., 2000 FTC LEXIS 43 (Apr. 27, 2000). The previous matter, a case involving six book publishers, was begun in 1989 and concluded in 1996. Harper & Row Publishers, Inc., 122 F.T.C. 113 (1996) (dismissing complaint). 5 On the DOJ’s use of Sherman Act criminal sanctions to challenge attempted monopoliza- tion and monopolization through the mid-1960s, see William E. Kovacic, The Intellectual DNA of Modern U.S. Competition Law for Dominant Firm Conduct: The Chicago/Harvard Double Helix, 2007 COLUM. BUS. L. REV. 1, 44–45 (2007) [hereinafter Kovacic, Double Helix]. 6 This policy adjustment is described in William E. Kovacic, Criminal Enforcement Norms in Competition Policy: Insights from US Experience, in CRIMINALISING CARTELS 45 (Caron Beaton-Wells & Ariel Ezrachi eds., 2011). 7 Kovacic, Modern Evolution, supra note 2, at 449. 8 See Press Release, U.S. Dep’t of Justice, Justice Department Reaches Settlement with Texas Hospital Prohibiting Anticompetitive Contracts with Health Insurers (Feb. 25, 2011), available at www.justice.gov/atr/public/press-releases/2011/267648.htm (announcing settlement of mo- nopolization claims against United Regional Health Care System of Wichita Falls, Texas). 9 Steven C. Salop, What Consensus? Why Ideology and Elections Still Matter to Antitrust, supra this issue, 79 ANTITRUST L.J. 601 (2014); see also Theodore Voorhees, Jr., The Political Hand in American Antitrust—Invisible, Inspirational, or Imaginary?, supra this issue, 79 ANTI- TRUST L.J. 557 (2014) (discussing alternative views about role of politics in U.S. antitrust enforcement). 10 On the tradeoff between agency independence and accountability, see William E. Kovacic, Competition Agencies, Independence, and the Political Process, in COMPETITION POLICY AND 2014] U.S. FEDERAL ANTITRUST ENFORCEMENT 689 For academics, practitioners, and public officials, the question is not whether political forces surround the DOJ and the FTC, or whether decisions by elected officials sometimes influence agency behavior. They assuredly do.11 The relevant queries are how, and how much? This Article addresses these questions by examining one dimension of the relationship between the federal antitrust agencies and the political process. It discusses how electoral politics can increase the influence of partisanship in the operation of the DOJ and the FTC. As used in this Article, partisanship is a determined commitment to party goals and causes. It manifests itself in a tendency to exaggerate the virtues of the party and to disregard or devalue the accomplishments of politi- cal rivals. Through the political appointment of the DOJ and FTC leadership, partisanship can spill over into the formulation and presentation of agency policy. As will be shown, partisanship can have destructive effects. Among other consequences, partisan attitudes can lead officials to act in ways that serve party goals at the expense of the agency’s programs and reputation. The parti- san tends to overlook how continuity of policy and incremental improvements have strengthened the DOJ and FTC antitrust programs regardless of which party controls the White House.12 Partisanship impedes the development of a norm that recognizes the importance of cumulative improvements, respects past contributions to agency effectiveness regardless of party origin, and en- courages long-term investments that enhance the agency’s capability and rep- utation.13 The striving for electoral success can beget partisanship, and, by eroding support for a norm that encourages cumulative investments for im- provement over the long term, partisan attitudes can diminish agency effec- THE ECONOMIC APPROACH: FOUNDATIONS AND LIMITATIONS 291 (Josef Drexl et al. eds., 2011); Michael J. Trebilcock & Edward M. Iacobucci, Designing Competition Laws Institutions: Val- ues, Structure and Mandate, 41 LOY. U. CHI. L.J. 455 (2010). 11 See William E. Kovacic, Congress and the Federal Trade Commission, 57 ANTITRUST L.J. 869 (1989) (discussing role of congressional oversight in shaping FTC policy); James F. Rill & Stacy L. Turner, Presidents Practicing Antitrust: Where to Draw the Line?, supra this issue, 79 ANTITRUST L.J. 577 (2014) (discussing presidential involvement in resolution of various DOJ antitrust cases). 12 This view is developed in WILLIAM E. KOVACIC, THE FTC AT 100: INTO OUR 2ND CEN- TURY (2009), available at www.ftc.gov/ftc/workshops/ftc100/docs/ftc100rpt.pdf; William E. Kovacic, The Digital Broadband Migration and the Federal Trade Commission: Building the Competition and Consumer Protection Agency of the Future, 8 J. ON TELECOMM. & HIGH TECH. L.J. 1 (2010); Kovacic, Modern Evolution, supra note 2; William E. Kovacic & David A. Hy- man, Competition Agency Design: What’s on the Menu?, 8 EUR. COMPETITION J. 527 (2012). 13 Norms are widely held views about how members of a group ought to behave. Norms often take the form of customs or standards that a group embraces. Although norms often are not embodied in a binding legal command, they can influence substantially the behavior of individu- als and institutions. See Robert D. Cooter, Structural Adjudication and the New Law Merchant: A Model of Decentralized Law, 14 INT’L REV. L. & ECON. 215, 218 (1994) (defining concept of norms); Lawrence E. Mitchell, Understanding Norms, 49 U. TORONTO L.J.