Private Antitrust Litigation Research Articles

Enforcement of US antitrust law in labour markets

In recent years, the US government has begun to focus antitrust enforcement efforts on labour markets. In 2022, for example, the Department of Justice (DOJ) blocked Penguin Random House’s acquisition of Simon & Schuster based on the theory that the merger would reduce compensation for authors.1 In the same year, the DOJ settled a lawsuit with three poultry processing plants that allegedly exchanged information on compensation of plant workers for the purpose of collaborating on pay decisions.2 The DOJ has also brought several criminal complaints against firms and individuals for fixing wages and agreeing not to poach one another’s employees, and it has intervened in numerous private cases to express its views on the application of antitrust to labour markets.3 The Federal Trade Commission (FTC) has also gotten involved. In 2020, the FTC submitted a filing before a state commission criticizing a hospital merger that it predicted would lower the wages of nurses.4 In 2023, the agency forced several companies to drop covenants not to compete that it had imposed on their employees.5 And in the same year, the FTC proposed a rule banning covenants not to compete.6 The two agencies are also reportedly planning to include a section on labour markets in their updated merger guidelines.7 Private antitrust litigation against employers is also flourishing.

Class Actions and Private Antitrust Litigation

When firms collude and charge supracompetitive prices, consumers can bring antitrust lawsuits against the firms. When the litigation cost is low, firms accept the cost as just another cost of doing business, whereas when the cost is high, the firms lower the price to deter litigation. Class action is modeled as a mechanism that allows plaintiffs and attorneys to obtain economies of scale. We show that class actions, and the firms’ incentive to block them, may or may not be socially desirable. Agency problems, settlement, fee-shifting, treble damages, public enforcement, and sustaining collusion through repeat play are also considered. (JEL D21, D24, D82, K15, K21, K41, L40)

Reorienting the sharing economy for social benefit: the nonprofit digital platform business model

PurposeDigital platforms enable the sharing economy and have become dominant business models in many industries. Despite their many benefits, negative externalities associated with the growth of for-profit digital platforms, such as Uber and Google, have ignited concerns among market participants, policymakers and society as a whole, without corrective market forces in sight. One way to address this problem is through a combination of government regulation, criminal enforcement actions and private antitrust litigation. This study aims to analyze an alternative approach, called the nonprofit digital platform (NDP), which is an emerging business model capable of unleashing free-market forces and enhancing the sharing economy’s social benefits.Design/methodology/approachThis study documents the negative externalities (actual and potential) of for-profit digital platforms, uses the product attributes model to explain the market position and strategy of NDPs with respect to for-profit digital platforms and provides recommendations for the successful launch and management of NDPs.FindingsAn NDP is a market-based alternative to antitrust, regulation and litigation that enhances the social value created by the sharing economy, but its success requires startup-like management that attracts and retains talent, capital, effective advertising and positive network externalities.Social implicationsNDPs can force free-market adjustments in the industries they enter, reduce the negative spillovers of for-profit digital platforms and increase social value by incrementally raising the level of competition.Originality/valueThis study conceptually explores the value that nonprofits could bring to the sharing economy in fulfilling its promise and provides strategic recommendations for social-digital entrepreneurs and nonprofits.

The Indirect Purchaser Rule and Private Enforcement of Antitrust Law: A Reassessment

Abstract Despite broad statutory language authorizing “any person” injured by an antitrust law violation to sue for damages, the Supreme Court of the United States has construed that language to bar antitrust damages claims by indirect purchasers, such as consumers two or more steps removed from antitrust violators. The Court and some scholars have justified the indirect purchaser rule on the ground that assigning direct purchasers exclusive rights to recover antitrust damages increases the likelihood of suit. But this article presents new evidence that the rule reduced private antitrust litigation by twenty percent. It argues that the rule should be abandoned, consistent with the statutory text.

Class Actions and Private Antitrust Litigation

When firms collude and charge supra-competitive prices, consumers can bring antitrust lawsuits against the firms. When the litigation cost is low, firms accept the cost as just another cost of doing business, whereas when the cost is high, the firms lower the price to deter litigation. Class action is modeled as a mechanism that allows plaintiffs and attorneys to obtain economies of scale. We show that class actions, and the firms' incentive to block them, may or may not be socially desirable. Agency problems, settlement, fee-shifting, treble damages, public enforcement, and sustaining collusion through repeat play are also considered.

Asymmetric Stakes in Antitrust Litigation

Private antitrust litigation often involves a dominant firm being accused of exclusionary conduct by a smaller rival. In such cases, the defendant generally has a much larger financial stake in the outcome. We explore the implications of this asymmetry in a model of litigation with endogenous effort. Asymmetric stakes lead antitrust defendants to invest systematically more resources into litigation, causing a downward bias in the plaintiff's success probability---a distortion that carries over to ex ante settlements. Enhanced damages cannot prevent this systematic bias. We show that, in most private litigation contexts, asymmetric stakes do not create any distortion, because the prospect of ex post (post-judgment) settlement makes the litigants behave as if the stakes are symmetric. But this does not occur in antitrust, because it proscribes certain ex post settlements. We consider how courts might mitigate the distortion by altering the plaintiff's evidentiary burden.

In for a Penny, in for a Pound? Legal Professional Privilege as a Shield Against Disclosure in Private Antitrust Litigation in Europe

Trust me, I’m a lawyer. Though more often than not intended as a joke, the phrase does in fact have a serious legal application. Legal professional privilege, in its most basic form, protects the confidentiality of communications between the lawyer and the client by precluding their compelled disclosure in legal proceedings. Under what circumstances it does so in practice can vary dramatically between jurisdictions, and within jurisdictions between criminal, civil and administrative proceedings. It can be a formidable parry in the cut and thrust of evidentiary sparring, ultimately determining whether certain information will be admissible as evidence. When decisive items of evidence are at stake, the success of a claim can turn on a single question of privilege. This is particularly true of private competition litigation. Communications between an undertaking and its lawyers may contain a detailed compilation of facts pertaining to an anticompetitive behaviour and its consequences and...

Private Antitrust Enforcement in the US and the EU - A Comparison of Key Issues

This paper explains how the EU has adopted some elements from the US system of private enforcement but has made very different policy choices with respect to other elements. The paper begins with a glimpse at the origins of private enforcement and a consideration of two of the biggest challenges to a comparison, namely the federal legal structures in the US and the EU and the different purposes of private enforcement (compensation v. deterrence). The core of this paper is a comparison of nine key issues of private antitrust litigation, including, among others: standing, passing-on, collective actions and discovery.

PRIVATE ANTITRUST AT THE U.S. INTERNATIONAL TRADE COMMISSION

This paper, drafted as an adjudicator's opinion in a recent case of nearly first impression, explores private antitrust adjudication in the Section 337 docket of the US International Trade Commission (ITC). There are several significant reasons why even a skeptic of the ITC's Anti-dumping, Countervailing Duty, and Safeguards docket (collectively, the “Title VII” docket)—as well as an antitrust skeptic—should be significantly less worried when cases normally expected to be brought in the Title VII portion of the ITC's docket as petitions are instead brought in the Section 337 portion of the ITC docket as complaints alleging ordinary violations of the antitrust laws. Private antitrust litigation fits with the plain meaning of the ITC's statute and with well-established antitrust case law. The ITC 337 docket also offers some practical benefits over courts and other agencies. The procedures do not rely heavily administrative deference; and do rely heavily on the full panoply of procedural devices ordinarily available in court for truth-testing of evidence including cross examination, all in a timeframe likely to be significantly shorter (around 18 months) than the many years typically required for antitrust litigation in federal court, and without the black box of a general jury verdict. What about the doctrine that federal courts developed called “antitrust injury?” The ITC relied on that doctrine to dismiss a case recently brought by the domestic U.S. steel industry against Chinese importers of steel. This paper explores some reasons why that doctrine does not fit the ITC 337 statute.

Disclosure of Documents in Private Antitrust Enforcement Litigation

Procedural tools aimed at access to information in general, and disclosure of documents in particular, are crucial for the effectiveness of private antitrust enforcement litigation and for facilitating more genuine equality of arms. Currently, profound differences exist among EU Member States’ civil procedure laws concerning disclosure of evidence held by the opponent. The transposition of the litigation disclosure mechanism contained in the Damages Directive will undermine the existing principles of Slovenian civil procedure. However, this is due to the fact that Slovenian law is outdated with regard to evidence disclosure. Not only that, it is also partially based on an erroneous premise, typical for the traditional civil law approach, whereby the principle against self-incrimination applies in civil cases in the same way as in criminal cases. As a result, the obligatory transposition of the Directive’s requirements should be perceived as a positive step for Slovenia. Yet this step will be successful only if followed by a general reassessment of evidence disclosure rules in Slovenian civil procedure law.

Cartel Damages Litigation in Brazil: A Brief Introduction

As Brazilian antitrust authorities continue to look to the American experience and encourage private antitrust litigation, the challenges facing practitioners and enforcers tend to become more complex. A clear view of the main topics and issues related to cartel damages claims in Brazil is a necessary starting point for the establishment of a mature and tested set of rules and practices.

In Re Libor: More Light, Please! -- Questions and Observations as the Decision Dismissing Antitrust Claims for Lack of Antitrust Injury Now Faces Appellate Review

In Re Libor: More Light, Please! -- Questions and Observations as the Decision Dismissing Antitrust Claims for Lack of Antitrust Injury Now Faces Appellate Review

Access to competition authorities' files in private antitrust litigation

The growth of private antitrust litigation in the courts of the Member States creates tensions between claimants and competition authorities. Claimants seek access to confidential records held by the authorities while the competition authorities try to maintain the confidentiality of those files. This article analyses the two main access routes to confidential information in the files of competition authorities in the EU. It first looks at access under Regulation 1049/2001 (Transparency Regulation). Then, the article assesses the framework for disclosure in the national courts, analysing the Court of Justice’s Pfleiderer and Donau Chemie decisions, its application in England and Germany, and the changes that are required with the adoption of the Damages Directive. It finds that both access routes tend to favour the protection of authority files and that access-seeking parties face high-legal thresholds for the disclosure of files and leniency documents. It argues that the raised standard for access demonstrates a policy change regarding private antitrust enforcement. EU policy makers and the courts have begun to moderate the principle of effective redress as expressed in Courage and Manfredi. In order to minimize repercussions for public enforcement they reduce the incentives for claimants to bring follow-on damages actions.

Private Antitrust Litigation: Procompetitive or Anticompetitive?

The antitrust laws are intended to permit procompetitive actions by firms and deter anticompetitive actions. We consider firms' incentives to use the antitrust lawsuits for strategic purposes, in particular to prevent procompetitive efficiency-improvement by rival firms. Our main result is that, ceteris paribus, smaller firms in more fragmented industries are more likely to use the antitrust laws strategically than larger firms in concentrated industries.

What Keeps Plaintiffs Away from the Court? An Analysis of Antitrust Litigation in Japan, Europe and the US

This paper challenges the classical view on the role of litigation in Japan by examining a particular type of litigation, namely private antitrust litigation. It shows that the widely held idea that antitrust litigation in Japan is rare only holds when compared to the US, not Europe. The comparison with Europe also casts doubt on the idea that a cultural aversion to litigation explains why so few antitrust lawsuits are filed in Japan and Europe. Instead, the institutional framework and the awareness and support for antitrust law are much more important. These are malleable factors, suggesting that antitrust litigation can boom in Japan and Europe, regardless of any cultural resistance.

Non-Mutual Offensive Collateral Estoppel in Private Antitrust Litigation: Lessons from the Microsoft Cases

For nearly 100 years, antitrust policy in the United States has reflected the important role of private enforcement by allowing private litigants to benefit from successful government enforcement actions. With the enactment of section 5(a) of the Clayton Act in 1914, prior judgments obtained by the government were given prima facie effect in follow-on litigation by private parties. Following the U.S. Supreme Court’s 1976 decision in Parklane Hosiery Co. v. Shore, non-mutual offensive collateral estoppel has since supplanted section 5(a) as the tool of choice in many private antitrust lawsuits. That doctrine, however, has been described as “detailed, difficult, and potentially dangerous,” and the cautious approach that some courts have adopted in the antitrust context is in tension with the policy preference expressed in the Clayton Act that favors giving private plaintiffs the full benefits of prior government judgments. The Microsoft antitrust litigation presents one of the most interesting and challenging examples of that tension, and thus provides important lessons for future cases. This article seeks to provide a framework, based on lessons learned in Microsoft, for the application of non-mutual offensive collateral estoppel in antitrust cases that gives effect to the policy considerations underlying section 5(a) of the Clayton Act, while remaining mindful of the concerns identified by the U.S. Supreme Court in Parklane Hosiery. It argues that a broader application of the doctrine is warranted in the antitrust context and that, in order to give private plaintiffs the full benefit of prior government enforcement actions, all issues decided in the earlier proceeding that were “necessary” to each analytical step undertaken by the court in deciding, under the applicable substantive standard, that the antitrust laws had been violated should be given preclusive effect.

The role of contribution among defendants in private antitrust litigation

The incidence of private actions for damages in antitrust cases has varied markedly across jurisdictions. The procedural rules surrounding private litigation may account for some of these differences. This paper explores the effect of rules concerning contribution among multiple defendants who are jointly and severally liable for a cartel infringement. The no-contribution rule is shown to lead to higher levels of aggregate damages and more information revelation to the private plaintiff. However the no-contribution rule also has the potential to neutralise any public leniency programme, thereby possibly reducing the number of cartels detected.

Beyond 'Essential Facilities': Innovation, Intellectual Property and Competition Policy Across the Atlantic

Beyond 'Essential Facilities': Innovation, Intellectual Property and Competition Policy Across the Atlantic

The Role of Contribution Among Defendants in Private Antitrust Litigation

To date the experience of the incidence of private actions for damages in antitrust cases has differed markedly across jurisdictions. The procedural rules surrounding private litigation may account for some of these differences. This paper explores the effect of rules concerning contribution among multiple defendants who are joint and severally liable for a cartel infringement. The no-contribution rule is shown to lead to higher levels of aggregate damages and more information revelation to the private plaintiff. However, the no-contribution rule also has the potential to neuter any public leniency programme, thereby possibly reducing the number of cartels detected.

How Vitamins Stimulated the Debate on Private Antitrust Litigation

How Vitamins Stimulated the Debate on Private Antitrust Litigation