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Experts, Daubert, and Judicial Gatekeeping: A Conversation with Edoardo Peruzzi and Christine Bartholomew

On this episode of Ruled by Reason, AAI Senior Counsel David O. Fisher chats with economist Edoardo Peruzzi and antitrust scholar Christine Bartholomew about the role of Daubert challenges in antitrust suits, focusing on the increasing role of Daubert as a gatekeeping device that may be hindering private antitrust enforcement.

The conversation begins with an examination of Peruzzi’s recent working paper, which finds that Daubert challenges have become more frequent in antitrust cases and that, although plaintiffs’ experts are challenged more frequently, defendants’ experts are more often excluded (6:30). Bartholomew places Peruzzi’s findings within a context of increased procedural gatekeeping in antitrust cases, including the conflation of Daubert issues with the requirements of class certification, which she argues has wrongly turned Daubert into an outcome-determinative mechanism that is hindering private antitrust enforcement (22:20).

The group then discusses potential solutions to this problem—including a different admissibility standard for economic testimony, increasing the use of court-appointed experts, and delaying the consideration of admissibility until the eve of trial—but finds none of them to be feasible. (30:15). Instead, they conclude that the solution lies in a return to the language of the Daubert trilogy and its goal of liberalizing the admissibility of expert testimony, which means keeping Daubert questions separate from the standards of class certification and rejecting efforts to treat the “fit” inquiry into a strict requirement of admissibility (40:05).

GUESTS

Edoardo Peruzzi is a postdoctoral researcher at Leibniz University Hannover. He studied philosophy and economics at the Scuola Normale Superiore, the University of Pisa, and the University of Siena. He was a visiting scholar at the TINT Centre for Philosophy of Social Science at the University of Helsinki and the Center for the History of Political Economy at Duke University. During his doctoral research, Edoardo studied the application of economic theory in legal proceedings, employing tools from philosophy of economics, philosophy of science, and empirical analysis.

Christine Bartholomew is the Vice Dean for Academic Affairs, a professor of law at University at Buffalo School of Law, and an associate editor for the ABA Antitrust Law Journal. Her academic publications have appeared in many leading academic journals and have been cited by state and federal courts and major news outlets. She is also the co-editor of the ABA’s forthcoming Antitrust Daubert Handbook. Prior to joining academia, she served in executive and lead counsel positions for numerous national, multi-million-dollar antitrust cases.

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AAI Asks Supreme Court to Mind the Nuances of Antitrust Class Actions (Labcorp v. Davis)

AAI has filed an amicus brief in Labcorp v. Davis, urging the U.S. Supreme Court to avoid unwittingly upending antitrust class actions in a case challenging statutory damages under the Americans with Disabilities Act (ADA).

In Labcorp, the defendant is a diagnostic testing company that provides medical blood and urine screenings. The plaintiffs are a putative class of blind patients who could not use Labcorp’s self-service kiosks to register and check-in at Labcorp locations, because the kiosks allegedly failed to comply with the ADA and California state law. The plaintiffs sued to recover statutory damages. A district court certified the class, and the Ninth Circuit affirmed.

Labcorp petitioned the Supreme Court for certiorari, arguing that the class should not have been certified because it allegedly contains uninjured members. Such classes, Labcorp argues, violate Article III and fail to satisfy Rule 23(b)(3), which requires that common issues predominate over individual issues in class litigation. The Supreme Court granted certiorari on the question of “Whether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III Injury.”

AAI’s amicus brief urges the Court to avoid painting with a broad brush. It explains that Labcorp’s arguments rest upon several false assumptions and threaten harmful unintended consequences because they fail to account for important distinguishing features of antitrust class actions.

The brief explains, first, that Article III injury can be a common question that supports a finding of predominance in antitrust class actions; it does not invariably give rise to any individual issues at all or necessarily imply that individual issues would predominate.

Second, Labcorp’s proposed rule, which would prohibit certification of classes containing uninjured members, would unnecessarily prevent settlements designed to avoid the cost of litigating the issue of whether there is a classwide Article III injury.

Third, Labcorp’s proposed rule elides important differences in the standards for establishing Article III injury and for establishing antitrust injury on the merits. The Supreme Court has held that (1) the former changes according to the stage of the litigation, and (2) the latter is subject to unique standards because the vagaries of the marketplace usually deny us sure knowledge of the precise amount of antitrust damages.

Fourth, Labcorp misses that in antitrust cases, unlike in certain statutory damages cases, the presence of uninjured class members usually does not alter the amount of claimed damages. Antitrust plaintiffs usually must rely on classwide econometric techniques to calculate damages because the competitive baseline in a but-for world, absent the antitrust violation, is unknown (owing to the illegal conduct).

Fifth, Labcorp’s policy arguments suggesting that class certification should be discouraged because it is often a death knell for litigation are not true in antitrust litigation.

The brief was submitted by AAI President Randy Stutz, with input and assistance from several leading antitrust class action experts.

Read the full brief here: AAI Amicus Brief in Labcorp v. Davis

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Working Paper No. 25-01: Mergers & Cooptive Acquisitions

A new wave of emerging companies developing foundation models has unleashed fierce competition in generative artificial intelligence. These emergents have significant innovation capabilities threatening incumbent tech companies. To protect themselves, incumbents have responded by partnering with leading product developers and subsuming smaller startups through quasi-mergers.

This working paper by AAI Research Fellow Alexandros Kazimirov explores whether certain quasi-mergers by large technology incumbents are “cooptive” acquisitions. As Mark Lemley and Matthew Wansley have described, cooption is a strategy whereby technology incumbents identify potentially disruptive technologies, gain influence over startups developing the technologies, and strategically influence the startups’ access to resources and regulatory controls affecting their ability to grow.

Using the Google-Character, Microsoft-Inflection and Amazon-Adept transactions as case studies, the working paper makes contextual comparisons of circumstantial evidence like exclusive licensing agreements, price premiums, market product proximity, and product discontinuation to assess the relative risk of harm to innovation caused by quasi-mergers. It finds that, even if there is high probability of harm, the structure of a quasi-merger can shield incumbents from government intervention because enforcement agencies cannot use injunctive relief to restrict employee mobility. It explores potential policy solutions involving startups, their founders, their employees, and the antitrust enforcement agencies to address threatened competitive harms without unduly limiting the exit options of startups.

Access the AAI Working Paper on Mergers & Cooptive Acquisitions.

AAI Working Papers are works in progress that may be revised and published elsewhere. The views expressed are solely the author’s and do not purport to reflect the views of the American Antitrust Institute.

*This paper has been accepted for publication by the Stanford University Codex Center’s Computational Antitrust Project. 

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Commentary by Fisher: Cleaning and Sharpening Our Antitrust Tools for the Age of AI

AAI Senior Counsel David O. Fisher has published a commentary drawing insights from an analysis of recent Section 1 cases involving allegations of algorithmic collusion.

Fisher argues that courts in algorithmic collusion cases can rely on existing antitrust tools to protect the competitive process by ensuring that AI is not used in ways that deprive the marketplace of independent centers of economic decisionmaking. Recent cases involving allegations of algorithmic price fixing show us that protecting competition in the era of AI means revisiting traditional assumptions about what tacit agreements look like and how tacit collusion may be addressed. Courts evaluating allegations of algorithmic collusion should focus functionally on whether the challenged conduct interferes with individual firms’ pursuit of their own independent self-interests. The threat posed by algorithimic collusion should prompt us to revisit our assumptions about the difficulty of crafting legal remedies to combat oligopoly pricing. AI-powered oligopoly pricing should be treated as a tacit price-fixing agreement when it has collusive effects and is capable of being enjoined.

Read the commentary: AAI Commentary on Algorithmic Pricing

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AAI’s Randy Stutz and Kathleen Bradish Discuss Multi-Market Balancing, Epic v. Google, and Key Antitrust Cases on Rethinking Antitrust

AAI’s Randy Stutz, President, and Kathleen Bradish, Vice President and Director of Legal Advocacy, sit down with Bilal Sayyed of Rethinking Antitrust to discuss key developments in antitrust law. Stutz shares insights from his recent Pro-Market blog post, Multi-Market Balancing in a New Antitrust Paradigm. Bradish discusses AAI’s recent amicus brief in Epic v. Google, arguing that the 9th Circuit reject balancing out-of-market benefits against in-market harms. They also explore other recent AAI amicus briefs, including two in the algorithmic price-fixing cases, one arguing against Noerr-Pennington protection for fraudulent claims, another arguing against a carve-out of the scope of the Foreign Trade Antitrust Improvements Act in private litigation.

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AAI Issues 2024 Impact Report

The American Antitrust Institute (AAI) has issued its 2024 Impact Report, highlighting its achievements and leadership in protecting and promoting competition for the benefit of American markets. In 2024, AAI’s work delivered tangible benefits for consumers, workers, and businesses through research, education, and advocacy that generated significant improvements in antitrust enforcement and policy outcomes. It is committed to expanding its resources, growing its capabilities, and strengthening its impact in 2025.

View the Impact Report

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AAI Urges Third Circuit to Overturn Dismissal of Suit Alleging Algorithmic Price-Fixing among Atlantic City Casino-Hotels (Cornish-Adebiyi v. Caesars Entertainment)

The American Antitrust Institute (AAI) has filed an amicus brief in Cornish-Adebiyi et al. v. Caesars Entertainment, Inc., et al., urging the Third Circuit to reverse the dismissal of a class action suit against six Atlantic City casino-hotels (Borgata, Caesars, Hard Rock, Harrahs, MGM, and Tropicana) and a revenue-management software company (Cendyn) for colluding to raise the prices of Atlantic City hotel rooms.

The suit alleges that the casino-hotels knowingly shared commercially sensitive information with Cendyn’s pricing algorithm, which used that information to make pricing and vacancy recommendations, and that the hotels’ near-universal acceptance of those recommendations raised the prices of Atlantic City hotel rooms above competitive levels. Following the reasoning of the district court in Gibson v. Cendyn Group, the district court dismissed the complaint for failing to satisfy the concerted-action requirement under Section 1 of the Sherman Act, emphasizing that the hotels contracted with Cendyn at different times, did not share the information directly with each other, and did not commit to accepting the algorithm’s recommendations in all cases.

In its brief, AAI argues that the district court’s formalistic analysis relied on plus factors that courts have traditionally used to identify human collusion, but which are not helpful in identifying algorithmic collusion. Such an approach effectively immunizes algorithmic price-fixing and threatens substantial consumer harm as AI becomes an increasingly common feature of our economy.

AAI’s brief explains that software powered by AI can help firms monitor and predict each other’s behavior in ways that were not previously possible. Rivals who contract with the same software provider can collude tacitly on price and output without communicating directly or making express agreements with each other. The brief argues that the antitrust laws were designed to be flexible enough to distinguish between procompetitive and anticompetitive uses of new technologies like AI, and long-standing Supreme Court precedent requires courts to focus on competitive realities rather than formalistic distinctions.

The brief was written by AAI Senior Counsel David O. Fisher, with assistance from AAI President Randy Stutz, AAI Board member Joshua Davis of Berger Montague PC and UC Law San Francisco, and Matthew Summers of Berger Montague PC.

Read the full brief here: AAI Amicus Brief in Cornish-Adebiyi v. Caesars

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AAI Asks Ninth Circuit to Prevent Trial Courts from Playing Monday Morning Quarterback with Juries’ Antitrust Damages Awards (Ninth Inning, Inc. v. NFL)

AAI has filed an amicus brief in the Ninth Circuit in Ninth Inning, Inc. v. NFL (In re NFL Sunday Ticket Antitrust Litigation), Nos. 24-5493 & 24-5691, asking it to reverse the district court’s alternative judgment vacating the jury’s $4.7 billion verdict. The district court’s judgment as a matter of law overturned a jury verdict against NFL teams for an illegal agreement to make out-of-market games available to live broadcast viewers only through Sunday Ticket, a bundled premium-price package on DirecTV.

AAI’s brief argues that the district court’s second-guessing of the jury verdict is not consistent with Supreme Court or Ninth Circuit precedent because it failed to assess the damages award by the correct standard: “just and reasonable” given the “totality of the circumstances.” Instead, the district court accepted defendants’ post-trial reverse engineering of the verdict and engaged in a piece-by-piece analysis of the hypothetical inputs into the damages calculations. It used that analysis to determine that the verdict was not supported by the evidence even though the aggregate amount of damages was significantly lower than models presented by the plaintiffs and admitted at trial.

AAI’s brief argues that the district court’s approach is overly stringent and allows defendants to profit from the uncertainty their illegal conduct created. Such a searching analysis of the jury’s damage award also impinges on the constitutional right to trial by jury that is guaranteed for private antitrust damages actions.

AAI’s brief explains that the right to a jury trial and respect for the integrity of the jury award are particularly important in private antitrust damages actions for at least two reasons. First, the jury trial is a key way in which antitrust law is held to its original democratic goals. Second, the jury damages award is a vital element of antitrust enforcement’s deterrence goals. To allow defendants found to have engaged in illegal conduct to escape unpunished is not just fundamentally unfair, it compromises the ability of antitrust enforcers to dissuade others tempted to engage in illegal but profitable conduct.

The brief was written by AAI Vice President & Director of Legal Advocacy Kathleen Bradish.

Read the full brief here: AAI Amicus Brief in In re NFL Sunday Ticket

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AAI Counsels Fifth Circuit to Uphold FTC’s Rulemaking Authority, Non-Compete Clause Rule (Ryan v. FTC)

AAI has filed an amicus brief in the Fifth Circuit seeking to overturn a district court decision stripping the FTC of substantive rulemaking authority to prevent unfair methods of competition under section 5(a) of the FTC Act. It also urges the court to reverse the district court’s order enjoining the FTC’s Non-Compete Clause Rule, which would declare most worker noncompetes unfair and make them subject to a cease-and-desist order.

In Ryan v. FTC, several plaintiffs and intervenors, led by the U.S. Chamber of Commerce, challenged the FTC’s authority to issue the Non-Compete Clause Rule and argued that the rule itself was arbitrary and capricious under the Administrative Procedures Act (APA). They argued that section 6(g) of the FTC Act, which gives the FTC power “to make rules and regulations for the purpose of carrying out the provisions of” the Act, should be read as giving the FTC authority to issue only procedural rules to carry out section 5(b), not substantive rules to carry out section 5(a).

The district court agreed, finding that section 6(g)’s lack of penalty provisions and its placement alongside the FTC’s authority to “classify corporations” supported the plaintiffs’ interpretation. It also held that the Rule was arbitrary and capricious because it banned nearly all worker noncompetes without sufficient justification.

AAI’s brief points out analytical errors in the district court’s interpretation. It explains that the text of section 6(g) must be read holistically and in context, consistent with the broader statutory design of the FTC Act. Unlike the Sherman Act, the FTC Act prevents conduct that harms competition in its incipiency and that does not require proof of actual or imminent anticompetitive effects, making the conduct well suited to ex ante​ rulemakings.

The brief explains that when incipient conduct is challenged in administrative proceedings, common law rules barring the conduct invariably emerge from case-by-case adjudications. APA rules—enforceable through the same preventative remedies used to enforce common law rules—are a more practical and sensible alternative when the FTC bars incipient conduct on a class-wide basis. Given the comparative efficiency of APA rules relative to common law rules, it is reasonable to believe Congress would have wanted the agency to deploy them where possible, albeit judiciously.  The statutory design, the historical context, the comparative efficiencies, and the fact that the text of section 6(g) contains no scope-limiting adjectives all suggest section 6(g) should be read according to its plain meaning.

The brief also explains that noncompetes are well suited to rulemaking because they have anticompetitive tendencies in the aggregate, meaning aggregate evidence would otherwise be introduced in individual proceedings if non-competes were challenged as incipiency violations case-by-case. Considering the Agency’s examination of the economic evidence, its consideration of the business justifications for noncompetes and employers’ reliance interests, and its evaluation of alternatives, the Rule satisfies deferential arbitrary-and-capricious scrutiny under the APA.

The brief was written by AAI President Randy Stutz and AAI Senior Counsel David O. Fisher.

Read the full brief here: AAI Amicus Brief in Ryan v. FTC

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AAI Asks DOJ to Scrutinize Anticompetitive Litigation Settlement in FuboTv v. Disney

On January 9, 2025, AAI submitted a letter to the Antitrust Division of the Department of Justice requesting that it investigate the recently announced settlement in FuboTv, Inc. et al. v. The Walt Disney Company, et al., No. 24-2210 (2d Cir. 2024), as well as the joint venture at issue in the underlying litigation.

Deep concerns about the threats to competition in live U.S. sports streaming led AAI to join with several other consumer advocacy and public interest organizations to file an amicus brief in support of Fubo’s suit to block Venu, a sports streaming joint venture of Disney, Fox and Warner Bros. Discovery. After evaluating Fubo’s antitrust claims, the District Court for the Southern District of New York issued a preliminary injunction to block Venu, agreeing with Fubo that the joint venture was likely to substantially lessen competition and cause irreparable harm by reducing choice and incentives to innovate and increasing the risk that the defendants would engage in anticompetitive collusion.

On January 6, the parties announced a settlement in which Walt Disney Company agreed to purchase 70 percent of Fubo and give it $300 million in settlement payments and loan commitments, paving the way for the anticompetitive joint venture to proceed. AAI’s letter expresses concern that the settlement of the Fubo suit does not appear to address any of the concerns raised by the district court or those expressed by the Antitrust Division, which also filed an amicus brief in support of Fubo. The settlements allows a joint venture to proceed that a federal district court judge has already found likely to be illegal. Worse still, under the guise of “strengthening” Fubo, the agreed terms instead eliminate Fubo as an independent competitor.

The letter urges the DOJ to step up to represent the interests of the millions of affected consumers left unprotected by the Fubo settlement. It asks the DOJ to initiate an investigation of all the terms of the settlement, including Disney’s proposed purchase of a 70% stake in Fubo, and the Venu joint venture. It also urges the DOJ take any actions necessary to ensure effective remedies to any harms to competition in live U.S. sports broadcasting that its investigation reveals. That includes potentially blocking in their entirety both Disney’s acquisition of Fubo and the Venu joint venture.

Read the full letter here: AAI Letter to DOJ in FuboTv v. Disney