Donald Baker’s Antitrust Enforcement: From Sunlight to Shadows

Today, the American Antitrust Institute (AAI) posted the seminal article “Antitrust Enforcement: From Sunlight To Shadows,” by Donald I. Baker. Mr. Baker is the 2015 recipient of the AAI Alfred E. Kahn Award for Antitrust Achievement. The article is the basis for his acceptance speech at AAI’s June 16th annual conference – Antitrust and the 2016 Presidential Transition – in Washington D.C.

The article notes the now familiar swing of the ideological pendulum in antitrust enforcement over the last 50 years, from the “’Government always wins’ era of unvarnished populism in Von’s Grocery to an era of economic fundamentalism found in, e.g., Pacific Bell v. linkLine.” Mr. Baker explains that “globally, we have gone from U.S. antitrust enforcement being the only game that mattered, to today’s complicated, multi-polar enforcement world where Brussels and Beijing, often seeming to be more activist than we are, thus periodically becoming bigger sources of U.S. clients’ antitrust concerns than Washington is.”

Baker’s focus in “Antitrust Enforcement: From Sunlight to Shadows” is the two enforcement choices that have made U.S. antitrust enforcement “less visible to the public and hence less important politically than it was when [he] was in the Government four decades ago.” One is the emergence of the plea bargain, or a “no prosecution” decision, on the criminal cartel enforcement side. The second is the use of a consent decrees or other agreement to allow a competitively sensitive merger to proceed, subject to some token divestitures.

The practical result of these choices, Mr. Baker explains, is that that the business community, their legal advisers, the general public, and interested journalists no longer see an “uncompromised version of what enforcers believed to be illegal in the context of a particular factual context that had been alleged.” In merger and cartel investigations, the Federal Trade Commission and U.S. Department of Justice seldom explain why they decided not to take any enforcement action. As a result, key questions go unanswered, including, for example: why the Government allowed a merger between major direct competitors with only minimal divestitures (or none at all), and why the DOJ charged some individuals who seemed central to the conspiracy covered by a corporate plea agreement, but not others.

As “Antitrust Enforcement: From Sunlight To Shadows” unfolds, Mr. Baker builds out the story behind its premise, including the factors contributing to the shift to pre-filing settlements. He also suggests how U.S. enforcement can become more visible and effective, how the international dimensions of enforcement have become more critical, and his own hopes and goals for enforcement moving forward.

“Antitrust Enforcement: From Sunlight To Shadows” can be downloaded here.