Antitrust Policy: A Century of Economic and Legal Thinking

U of California, Berkeley, Center for Competition Policy Working Paper No. CPC99-09

28 Pages Posted: 26 Feb 2004

See all articles by William E. Kovacic

William E. Kovacic

George Washington University - Law School; King's College London – The Dickson Poon School of Law

Carl Shapiro

University of California, Berkeley - Haas School of Business

Date Written: October 1999

Abstract

Passage of the Sherman Act in the United States in 1890 set the stage for a century of jurisprudence regarding monopoly, cartels, and oligopoly. Among American statutes that regulate commerce, the Sherman Act is unequaled in its generality. The Act outlawed every contract, combination or conspiracy in restraint of trade and monopolization and treated violations as crimes. By these open-ended commands, Congress gave federal judges extraordinary power to draw lines between acceptable cooperation and illegal collusion, between vigorous competition and unlawful monopolization.

By enlisting the courts to elaborate the Sherman Act's broad commands, Congress gave economists a singular opportunity to shape competition policy. Because the statute's vital terms directly implicated economic concepts, their interpretation inevitably would invite contributions from economists. What emerged is a convergence of economics and law without parallel in public oversight of business. As economic learning changed, the contours of antitrust doctrine and enforcement policy eventually would shift, as well.

This article follows the evolution of thinking about competition since 1890 as reflected by major antitrust decisions and research in industrial organization. We divide the U.S. antitrust experience into five periods and discuss each period's legal trends and economic thinking in three core areas of antitrust: cartels, cooperation, or other interactions among independent firms; abusive conduct by dominant firms; and mergers.

Keywords: Antitrust, Sherman Act

JEL Classification: K21, K00, N4

Suggested Citation

Kovacic, William E. and Shapiro, Carl, Antitrust Policy: A Century of Economic and Legal Thinking (October 1999). U of California, Berkeley, Center for Competition Policy Working Paper No. CPC99-09. Available at SSRN: https://ssrn.com/abstract=506284 or http://dx.doi.org/10.2139/ssrn.506284

William E. Kovacic

George Washington University - Law School ( email )

2000 H Street, N.W.
Washington, DC 20052
United States
202.994.8123 (Phone)

HOME PAGE: http://www.law.gwu.edu/faculty/profile.aspx?id=1731

King's College London – The Dickson Poon School of Law

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

Carl Shapiro (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
510-642-5905 (Phone)

HOME PAGE: http://faculty.haas.berkeley.edu

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