The Corner

‘Administration Plans to Strengthen Antitrust Rules’

According to the New York Times:

The President’s top antitrust official this week plans to restore an aggressive enforcement policy against corporations that use their market dominance to elbow out competitors or to keep them from gaining market share.

The new enforcement policy would reverse the Bush administration’s approach, which strongly favored defendants against antitrust claims. It would restore a policy that led to the landmark antitrust lawsuits against Microsoft and Intel in the 1990s.

And because the administration can’t cut the cord with the Clinton administration, Christine Varney, the head of the Justice Department’s antitrust division, will revive an old Clinton rule with the help of the former president’s staff.

Ms. Varney, who headed the Internet practice group of the Washington-based Hogan & Hartson law firm, served as a commissioner at the Federal Trade Commission in the 1990s after working in the White House during the early years of the Clinton administration.

Signaling her intent to revive a moribund antitrust program, she has recruited a collection of senior aides, many of whom are seasoned antitrust litigators or worked in the Clinton administration and the Federal Trade Commission and were involved in many prominent cases, including the one against Microsoft. They include Molly S. Boast, William Cavanaugh, Gene Kimmelman, Carl Shapiro and Philip J. Weiser.

Harvard University’s Greg Mankiw comments on the upcoming policy. He writes:

The right sees competition as a pervasive feature of the economy and market power as typically limited both in magnitude and duration. The left sees large corporations with substantial degrees of monopoly power that need to be checked by active antitrust policy.

And he asks:

Is it bad for consumers when a company bundles products together? My father bought a primitive car air conditioner and installed it himself in our 1962 Buick. Now, cars and air conditioners are routinely sold together–and consumers are better served. A three-piece suit, a ham-and-cheese sandwich, and a semester at Harvard are all made of components that could be sold separately. Not even the most zealous Justice Department lawyer would try to break up these products.

Read the whole post here.

Finally, over at Marginal Revolution Tyler Cowen rightfully notes:

In fact the unfolding of the crisis is an object lesson in how antitrust policy doesn’t target the real competitive abuses much at all.

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