Antitrust's Democracy Deficit
Fordham Law Review, Vol. 81, 2013
NYU Law and Economics Research Paper No. 13-05
Loyola University Chicago School of Law Research Paper No. 2013-008
48 Pages Posted: 24 Jan 2013 Last revised: 15 Apr 2013
Date Written: January 23, 2013
Over the past fifty years, many scholars have tried to explain what has caused the dramatic decrease in antitrust’s political salience, but the purpose of this article is more to describe how the shift has affected the way we now do the “antitrust enterprise” and to connect this shift to our concern for the political values that we believe underlie the antitrust laws. We connect free markets with free people, favoring open markets and the opportunity to compete as well as seeing the connection between free markets and democratic values and institutions. We also believe that a balance of institutional power is necessary to advance the goals that free markets embody.
The institutional aspects of today’s antitrust enterprise, however, are increasingly out of balance, threatening the democratic economic and political goals of the antitrust laws. The shift that Richard Hofstadter first described has led to an antitrust system captured by lawyers and economists advancing their own self-referential goals, free of political control and economic accountability. Some of this professional control is inevitable, of course, because antitrust is a system of legal ordering of economic relationships. But antitrust is also public law designed to serve public ends. Today’s unbalanced system now puts too much control in the hands of technical experts, moving antitrust enforcement too far away from its democratic roots.
We characterize the result of this shift toward technocracy as antitrust’s democracy deficit. We draw upon the concept of a democracy deficit from the literature analyzing and critiquing the European Union and the World Trade Organization. The term has generally been used to refer to policy making by unaccountable and non-transparent technocratic institutions far removed from democratic (or national) control. The concern for democratic decision making has also been reflected in a new interest in global administrative law and the importance of basic principles of transparency and due process as a way to control the administrative state. This interest in administrative law principles has likewise led to a closer examination of how well antitrust conforms to due process and institutional norms. Our concern over antitrust’s move away from more democratically controlled institutions toward greater reliance on technical experts is not just animated by a theoretical preference for democracy. A preference for democratic institutions implicitly assumes that more democratically arranged institutions will, in general, produce preferable antitrust policies and outcomes. We think this is particularly true today, when the imbalance between democratic control and technocratic control has put antitrust on a thin diet of efficiency, one that has weakened antitrust’s ability to control corporate power. Nevertheless, our concern about a democracy deficit does not lead us to a full-throated embrace of populism. Political values change over time, affected by how the world has changed and the lessons we can take from the social sciences. Rather, we think that by redressing the democracy deficit we can move the needle back toward policies that reflect more general political understandings and views of antitrust policy and improve the institutions and outcomes for antitrust law in the process.
We begin our article by charting the democracy deficit as reflected in the conduct of the major institutions of the antitrust system — the courts, the Congress, and public enforcers — and compare the situation in the United States with that of the evolving competition law enforcement regime in Europe. In the second part of the article we explore the link between technocracy and ideology, discussing how a technocratic approach has today come to support an extreme laissez faire ideology for antitrust enforcement. Finally, our article concludes with some thoughts on why more democracy would be good for antitrust.
Keywords: antitrust, competition law, democracy deficit, technocracy, modernization, modernisation, private rights of actions, attorneys general, FTC, Antitrust Division, consent decree, Sherman Act, Clayton Act, error costs, rule of reason, European Commission, Tunney Act
JEL Classification: B21, C70, D4, D6, K21, K4, L1, L4, N42
Suggested Citation: Suggested Citation