Each new year, the ancient Babylonians made resolutions in the form of promises to the gods that – if fulfilled – would result in good favor in the coming year. Early Christians used the occasion of the new year to reflect on past mistakes and to resolve to do better in the future. Today, about half of all Americans say that they annually make New Year's resolutions. Whether the number of antitrust lawyers and practitioners making resolutions is higher or lower than the overall average remains to be seen. Nonetheless, with the philosophy of the ancients in mind, here are some thoughts on five potential New Year's resolutions for antitrust enforcement agencies:
1. Resolve to provide meaningful guidance to businesses on antitrust enforcement principles and in merger cases.
Transparency in terms of enforcement principles helps ensure that government actions are consistent, fair, and accountable, and that businesses understand what conduct is likely to be viewed as lawful or unlawful.
When businesses understand how enforcement decisions are made, they are more likely to stay on the right side of the law – transparent guidelines help individuals and organizations understand what is expected of them and what the consequences of noncompliance might be. Transparency in enforcement guidelines is a key component of good governance, promoting fairness, accountability, and public trust.
In merger control, parties and counsel engaged in transactions under review will provide extensive white papers, voluntary submissions, documentation, economic presentations, and other materials in an effort to educate and persuade agency staff. To some extent, the US federal enforcement agency staffs will engage in a dialogue with merging parties and their legal counsel throughout the review process which can include sharing the general nature of their concerns. However, the extent of disclosure is typically closely managed. In part, this is done to protect the integrity of the investigation and the confidentiality of sensitive information. But it may also be done to maintain an informational advantage in the event of challenge.
There are compelling reasons for the US enforcement agencies to share additional information with merging parties to ensure a fair and transparent process. Both Directorate-General for Competition (DG COMP) and the UK Competition and Markets Authority (CMA), for example, often do provide more insight into their thought process without sacrificing investigative integrity and confidentiality. Providing additional disclosure without violating confidentiality principles would help to provide sufficient information for the parties to understand the agency's concerns and respond effectively, without compromising the broader enforcement process.
2. Resolve to make enforcement decisions based on antitrust principles and not politics.
Antitrust enforcement should be guided by objective legal and economic analysis, free from political influence and favoritism. This approach helps ensure that markets remain competitive, consumers are protected, and businesses operate within a fair and predictable legal framework.
There is a legitimate political dimension to antitrust and legitimate debate to be had about its role, including in protecting small businesses. There's nothing wrong with that, and that discourse should continue, as Robert Pitofsky and others have contemplated. See, e.g., Robert Pitofsky Political Content of Antitrust, 127 U. Pa. L. Rev. 1051 (1979).
However, enforcement decisions should focus squarely on competition concerns, which ensures certainty, allowing businesses to operate and plan for the future, and maintain confidence in the fairness and effectiveness of the legal system.
3. Resolve to continue to vigorously prosecute monopolists and price-fixers.
Vigorous enforcement is crucial to maintaining competitive markets, protecting consumers, and fostering innovation: monopolistic practices and price-fixing harm consumers by leading to higher prices, reduced choices, and potentially lower-quality products and services. Energetically prosecuting these anti-competitive behaviors helps ensure that consumers benefit from fair prices and a variety of options.
But antitrust cases, especially monopolization cases, are complex, difficult, and controversial. They need to be chosen wisely; careful consideration should be given to both the right outcome and the likelihood of prevailing before extending taxpayer funds in substantial prosecutions.
4. Resolve to adhere to a notion of regulatory humility.
With a hat tip to former FTC Commissioner Margaret Ohlhausen, regulatory humility is a valuable guiding principle for antitrust enforcement agencies, by encouraging a careful, evidence-based approach that recognizes the complexity of markets and the potential for unintended consequences. By balancing vigilance against anticompetitive behavior, with an understanding of the limits of regulatory knowledge and intervention capabilities, agencies can more effectively promote competition, innovation, and consumer welfare.
Markets may be complex and dynamic, often involving rapidly evolving technologies and business models. Regulatory humility acknowledges that agencies may not always fully understand all the nuances and long-term implications of market activities. And aggressive intervention without fully understanding market dynamics can lead to unintended consequences that may stifle innovation or otherwise harm consumers.
Regulatory humility ensures that enforcement actions are predictable, consistent, proportionate, and grounded in a clear framework. Agencies that demonstrate regulatory humility build trust with the public and businesses, leading to better compliance and cooperation from businesses, while continuing to be effective in protecting consumers and competition. It is a lodestar that, like proportionality, should inform every regulatory decision, from case prioritization, identification and scope of harm to any action to be taken or penalty imposed.
5. And, of course, resolve to get in better shape this year.
No list of resolutions is complete without this one. And this is the year!
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