Morality and Antitrust

Abstract:     
Although the Sherman Act was enacted over a century ago, antitrust enforcers, policy makers, and scholars have largely circumvented the morality of antitrust crimes. Its absence is remarkable given the vigorous debate over the appropriate civil and criminal penalties for antitrust violations. Under the continued influence of the Chicago-school's neoclassical economic theories, antitrust analysis is primarily concerned with economic efficiency. Since terms like morality and evil are judgmental, not descriptive, they are deemed outside the discourse of economic theory's self-described positivism. But antitrust analysis is not beyond the judgmental. Over the past thirty years, while antitrust's civil remedies have remained relatively unchanged, the criminal penalties for price fixing, bid rigging, and other Sherman Act antitrust violations have soared - from a misdemeanor to a felony punishable by up to ten years imprisonment. If the criminal laws reflect society's moral judgments, then antitrust and morality ultimately are intertwined. This article provides a background of antitrust violations and the flawed economic theory of optimal deterrence that has played a critical role in shaping the criminal sanctions for Sherman Act violations. Despite the escalation in antitrust's criminal penalties, there is no clear evidence that optimal deterrence has been achieved. The article next introduces morality and asks what role morality could play in the field of antitrust, if optimal deterrence alone is insufficient to effectively deter violations. After examining under a three-part standard whether antitrust crimes can indeed be deemed immoral, the article weighs some of the benefits and risks of supplementing antitrust crimes with a moral component and the risks of the current course - namely, ignoring morality.

Number of Pages in PDF File: 105

Keywords: Antitrust, Law and Economics, Ethics, Behavioral Law and Economics, Criminal Law

JEL Classification: L40, L41, K42, K21, K14

Accepted Paper Series