banner ad broker Movie Ad
Create a free acount with PRWeb!
Deposition Designation Station

Antitrust law currently lacks a unified theory of liability and damages. But the Supreme Court's recent acceptance of consumer welfare as the goal of antitrust law underscores a growing judicial inclination to construe antitrust liability rules to encourage efficient production and efficient resource allocation. As the Court reconstructs the law of antitrust liability, it should also revise the law of antitrust damages by defining the rights created by those damage measures to accomplish specific economic goals.

Section 4 of the Clayton Act supplements criminal antitrust sanctions by awarding successful private plaintiffs three times the amount of their injury. The purposes of treble damages are twofold: to compensate plaintiffs for their injury and to punish the defendant in order to deter future violations. Unfortunately, courts construing section 4 have assumed that all antitrust violations cause essentially the same kind of competitive injury. They have, therefore, computed damages for different classes of anticompetitive behavior by the same method, regardless of whether deterrence and compensation are economically justified. But the economic injury that a firm causes consumers by exploiting market power differs intrinsically from the injury it causes competitors by obtaining, maintaining, or expanding that market power. Consequently, both the rationale for assessing antitrust damages and, as a corollary, the method for calculating their amount necessarily depend on whether the injurious behavior is exploitative or expansionary.

Although the view that antitrust law should seek to maximize consumer welfare has many adherents, this note assumes that the antitrust laws should serve to maximize the wealth of society-that is, of both producers and consumers-rather than the wealth of consumers alone. Furthermore, the neglected law of antitrust remedies is as important to this goal as the law of antitrust liability. Part I of the note analyzes the consumer's economic injury from exploitative behavior and shows that, prevailing contrary opinion notwithstanding, the Clayton Act does not unambiguously establish a consumer right to be free from such injury. Because the prevailing interpretation may cause allocative inefficiency, Part I proposes a countervailing producer's right and a corresponding damage rule.

Part II analyzes the kind of injury that competitors suffer from expansionary behavior. It criticizes the competitor's right suggested by the current damage rule and proposes an alternative right and damage rule that would improve social welfare by enhancing productive efficiency. Part III proposes implementing the economic rights suggested in Parts I and II through a judicial test for calculating antitrust damages that would severely restrict the availability of such damages.


Read entire article (PDF).

J. Gregory Sidak is an Expert Economist in the fields of Antitrust, Telecommunications Regulation, Commercial and Investment Arbitration, and Intellectual Property Law. Prof. Sidak is the Ronald Coase Professor of Law & Economics at Tilburg University and the Chief Economic Expert at Criterion Economics in Washington, DC. The focus of his research has been regulation of network industries, antitrust policy, the Internet and electronic commerce, intellectual property, and constitutional law issues concerning economic regulation.

©Copyright - All Rights Reserved