The Very Best of The Antitrust Religion

Here is the first article of a new series on Concurrentialiste Review in which I summarize books on antitrust law – not by writing an analysis myself, but by taking the “best” extracts from them. That way, you save time and I’m happy, everybody’s a winner!

I start with Edwin Rockefeller’s The Antitrust Religion (2007). The author served as chairman of the Section of Antitrust Law of the American Bar Association, for four years on the staff of the Federal Trade Commission, and since 1961, he has been chairman of the Advisory Board of the Bureau of National Affairs’ Antitrust & Trade Regulation Report. His book is often acerbic, sometimes unfair and false on very rare occasions. The author assumes a radical bias; I can only recommend his reading to all antitrust/competition law specialists. Today, we see indeed the Second Coming of the Antitrust Religion, ‘Hipster Antitrust’. They also are true believers and they preach the exact opposite of Edwin Rockefeller’s positions. Let’s remember that way that before The Hipster Antitrust was The Agnostic Antitrust.

Allow me here to state that I do not agree with all the positions taken by Edwin Rockefeller, but that they have the merit – in addition to being scathing – of asking the right questions. In the book, Rockefeller argues that the existence and development of antitrust law fit the patterns of a religion in which believers never question the foundations. There are those who are at the head of the church, the believers, the sermons, the rituals… He tackles the terms we use, Sections 1 & 2 of the Sherman Act, merger control and more!

Thibault Schrepel



We aspire to a government of laws, not of men. The rule of law implies ascertainable, coherent rules for guiding and judging behavior. It is the thesis of this book that antitrust law is not consistent with our aspiration for a rule of law. There is no such thing as antitrust law. Antitrust is a religion. Antitrust enforcement is arbitrary, political regulation of commercial activity, not enforcement of a coherent set of rules adopted by Congress {p.1}.

The meaning

Antitrust is not defined in any of the provisions of the antitrust statutes. It can’t be translated into foreign languages. Antitrust was not enacted. It is not a coherent set of rules. You can’t look it up. {p.4}. Numbing students’ minds begins by introducing the untranslatable word “antitrust,” which has no fixed content. Where the word came from and its lack of definition are not discussed. Professors of antitrust law, such as those at Harvard quoted in chapter 1, are at ease with the regal personification of antitrust implied in terms like “antitrust’s domain,” “the task of antitrust,” and “the targets of antitrust.” Such professors are able to work with the explicit personification of antitrust by the use of active verbs in phrases like “antitrust seeks” and “antitrust does not take for granted”—implying that the professor is on speaking terms with the seeker or doer, and that someday the student may be, too {p.22}.

{Equally}, there is no consensus on what meaning to give to the word “competition.” Most people in business say they favor competition, and yet they use government to protect themselves from it any way they can. At least five different meanings of the word “competition” have been suggested: (1) rivalry, (2) the absence of restraint over one person’s economic activities by another, (3) that state of the market in which the individual buyer or seller does not influence the price by his purchases or sales, (4) the existence of fragmented industries and markets preserved through the protection of viable, small, locally owned businesses, and (5) “any state of affairs in which consumer welfare cannot be increased by moving to an alternative state of affairs through judicial decree.” {p.22}.

The believers

Antitrust can’t be amended, reformed, or repealed. It is an intuitive mix of law, economics, and politics; a mystical collection of aspirations, beliefs, suspicions, presumptions, and predictions {p.5}. Even if allocative efficiency were to be accepted as the sole rationale for decisions enforcing the antitrust statutes, fairness and equity goals, still widely and firmly cherished, could be pursued through imaginative application of the imaginary concept of market power. Indeed, market power has replaced concentration as the all-purpose antitrust hobgoblin and the primary evil at which the ceremonial process of antitrust is now directed {p.38}.

{And yet}, the antitrust community uses market power, an imaginary concept from economic theory, as though the term describes something that actually exists. Antitrust is pro competition. To what is antitrust anti? The antitrust statutes don’t contain an answer to that question. The antitrust community has supplied one. Antitrust is anti market power {p.39}. Market “power” is the imagined power that a seller might have if an assumed future, in which all other things remain unchanged and which cannot be verified, were to occur. Government forces citizens to pay taxes. That is real power. Business firms cannot force citizens to pay for anything. Power cannot be achieved by high sales volume. There is no right to sell. No one can be forced to buy {p.44}.

{But} belief in market power is critical for the antitrust community. If there is no such thing as market power, there is no point to antitrust. Where would the Apostle’s Creed be without the virgin birth? Belief in the effect of a placebo, like belief in the power of prayer, may do some good and does no harm to nonbelievers. By comparison, belief in market power carries a potential for mischief and provides no rational basis for normative rules {p.45}.

The community

There are three steps in the process of joining the antitrust community. The required skills can be acquired in law school or by reading or listening to continuing legal education lectures. First, one must become familiar with a few statutory provisions and be able to recall them at any time. Second, one must learn to recognize a few terms not found in the statutes, such as “per se” and “rule of reason” and a few case names, like Illinois Brick and Noerr-Pennington so as not to be one-upped by other initiates, who like to use case names as shorthand for the doctrines they contain. Third, one must pick up a few terms from microeconomic theory {p.16}.

The largest gathering of the membership occurs during the annual spring meeting in Washington, timed for the cherry blossoms. At the 2006 meeting in late March, 2,200 members had preregistered before the meeting began. The fee was $725. Participants came from 43 states and 38 countries. For dinner, 118 tables seating 10 persons each were sold out. “Non-government” people paid $135 for a seat; “government, academic, and students” paid $95. Cocktails were provided at massive receptions sponsored by law firms {p.18}. Participation in activities of this sort provides members of the antitrust community opportunities for foreign travel, for business development, and for reinforced feelings of self-righteous satisfaction with “spreading the antitrust gospel” {p.25}.

{And} spreading the gospel is not confined to the continental United States. In somewhat the same pattern as the attorney general’s National Committee to Study the Antitrust Laws during the Eisenhower administration, an International Competition Policy Advisory Committee created during the Clinton administration published a weighty report and served as a springboard for members of the U.S. antitrust community to advance their careers doing missionary work abroad. An International Competition Network has been organized. Its fifth annual conference, held in Cape Town, South Africa, in May 2006, was reported to have attracted “nearly 300 representatives from about 70 antitrust agencies.” The fourth annual conference, held in Bonn, Germany, in June 2005, was attended by “more than 400 representatives of 80 competition agencies and competition experts from international organizations and the legal, business, consumer, and academic communities” {p.25}.

Section 1

Section 1 of the Sherman Act designated as a federal crime “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” That declaration of Congress would have outlawed any contract in interstate commerce, because every contract restrains some trade {p.5}.

To avoid that truism, the judiciary invented the so-called rule of reason, amending the prohibition by Congress of every contract in restraint of trade to prohibit only those contracts found by the courts to “unreasonably” restrain trade. As a result, unless the restraint is one that the Supreme Court has presumed to be unreasonable— such as the so-called per se offenses discussed later—it may be impossible to tell whether a contract is unlawful without a lengthy trial {p.5}.

{So}, if efficiency can justify a merger that supposedly eliminates competition, why can’t it justify price cooperation that is only a partial merger? “Tensions” are “emerging” in the law of price fixing. An efficiency defense could evolve out of this tension. To do so, it would have to overcome the antitrust community’s strong emotional attachment to seeing price fixing as theft. According to the assistant attorney general for antitrust, “This type of conduct deprives consumers of their right to competitive pricing.” Like belief in the Standard Oil legend and fear of corporate consolidation, antipathy to agreements affecting price is deep and wide (p.89). No evidence has been found that agreements as to price are necessarily sufficiently damaging to consumer welfare to outweigh the cost of government action against them. Perhaps some are and some are not. There is no way to tell in advance which are which. Antitrust believers assume that unobjectionable instances of price fixing are “rare.” The only available empirical data suggest otherwise {p.91}.

Section 2

Section 2 of the Sherman Act made it a crime “to monopolize” or “attempt to monopolize” any part of the trade or commerce among the several states or with foreign nations (…) In 1966 the Court sought to differentiate between willful acquisition of monopoly power and being an effective competitor but was unable to state any rule for doing so {p.6}.

The Standard Oil legend is a starting point for belief in antitrust in somewhat the same way that belief in the virgin birth supports the Apostle’s Creed. Without an acceptance of the Standard Oil legend, the collection of fears, assumptions, and predictions that constitute the antitrust religion would have nothing to build on. If the legend were shown to be without factual foundation, the Sherman Act may have been aimed at something that never existed. Legal action to enforce the statute might be chasing a ghost. That could be the reason it is so difficult to define monopolization—it never happened. Antitrust might be, as professor D. T. Armentano has asserted, a “hoax” {p.49}.

{In fact}, antitrust concepts give a sinister characterization to the ordinary phenomena to which they are applied. “Oligopoly” is a good example. People who are learned in antitrust vocabulary know that an oligopoly is simply any number of sellers more than one—a common situation, but it sounds to the average citizen like a nasty condition and cause for concern {p.10}.


Supreme Court doctrine on monopolization contains no clear statement of what the law allows or prohibits. By comparison, Court doctrine as to mergers is clear. Section 7 of the Clayton Act prohibits mergers that may “lessen competition” or “tend to create a monopoly.” The Supreme Court has interpreted the statute to cover all mergers. Under the Court’s statutory interpretation there are no mergers that cannot be said to lessen competition or tend to create a monopoly. In effect, mergers are per se unlawful {p.64}.

{And} horizontal mergers offer enough professional activity to keep the antitrust community busy, and they are easy to attack. Horizontal mergers are by definition prohibited by the statute. Horizontal mergers are mergers of competitors. Because it can be assumed that the combined company will not compete with itself, any merger of competitors will eliminate the competition that existed between the parties before the merger and, thus, lessen competition to that extent {p.66}.

{In the end}, most mergers are allowed. A few mergers are prevented. Some mergers are modified. No mergers are enforced. The antitrust community uses the term “merger enforcement” even though no mergers are being enforced because it likes to think of what it is doing as law enforcement. Merger regulation is not law enforcement. No ascertainable rule is being enforced. It is an element of the antitrust belief that antitrust is a desirable alternative to regulation. Antitrust believers do not wish to acknowledge that the existing process of merger review is not law enforcement but whimsical government regulation of mergers. Merger review, merger prevention, merger control, and merger regulation are called “merger enforcement” by the antitrust community to preserve the fiction that government interference with mergers is law enforcement. The antitrust believer likes to think of unpredictable selective prevention of mergers as “calling balls and strikes,” acting as an umpire to keep the economy fair and free of regulation {p.72}.

The ritual begins when two prominent companies propose to merge. They file notification forms. “Antitrust concerns” are expressed. Government officials demand further information. Being forced to wait, the parties may call off the merger. Executive branch officials, legislators, state government officials, consumer groups, customers, suppliers, and competitors are heard from privately, some in support and some opposed. The Guidelines provide a language in which to state objections. Phrases like “market power,” “lessen competition,” and “increase concentration” are intoned. Sometimes government attorneys broker a political solution. Sacrificial offerings may be made, such as promises to sell off a bakery, a brewery, or a casket plant. Whether the merger goes through or is called off, antitrust concerns are taken care of. The statutes and Warren Court interpretations remain in place. Fear of corporate consolidation is allayed. Antitrust is celebrated. Belief in antitrust is preserved {p.73}.


{In the end}, the antitrust statutes are pious declarations against evil. Antitrust was founded on the desire to solve a basic problem of capitalism: What to do about the losers? The statutes reflect a hope of preserving a nation of farmers, craftsmen, and traders in small towns before industrialization and corporate organizations transformed America into factories, offices, and cities. Antitrust is celebrated by a ritual of legal proceedings supposed to keep trade both free and fair {p.99}. Antitrust (…) is in the good old American tradition of the sheriff of a frontier town: he did not sift evidence, distinguish between suspects, and solve crimes, but merely walked the main street and every so often pistol-whipped a few people {p.42, quoting Bork}.

{But} not all antitrust practitioners are true believers. A few see antitrust as a meaningless word game without merit but rewarding to those who play it well. Others are skeptical about some basic antitrust beliefs but see antitrust as needed protection against short-run market distortions. They recognize that what they see as market imperfections can’t survive the long run. They see antitrust as justified by the need for action now. Fixing the point at which the short run turns into the long run is unresolved. The Court of Appeals in the Microsoft case spoke of ‘‘the relatively near future.’’ The proceedings in that case had an air about them of the need to act quickly before it’s too late, before the problem has taken care of itself, before it becomes obvious that antitrust is irrelevant {p.100}.

{As a matter of fact}, economics will not turn antitrust into law enforcement. Theoretical discussion of markets and market power is based on static analysis, not on facts in the real world. The definitions in the analysis assume a world standing still. Belief in market power requires ignoring the long run. In the antitrust world there is no long run. It’s all about an imaginary now {p.100}. The public should be told what is going on, that antitrust decisions are political decisions misleadingly portrayed as law and economics {p.103}.


Bonus for those who have read the entire article:

Curtis Mayfield – “I Plan to Stay A Believer” (1971)

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