Treble Damages Research Articles

Market as Mirage

George J. Stigler (1985)1 I find much to endorse in Professor Areeda's magisterial presentation: (1) his description of the dubious role of juries as antitrust policymakers; (2) his recognition of the importance of clearly defining those anticompetitive improprieties that spell monopolization; and (3) his acknowledgement of the need for doctrines that do not chill innovative incentives or competitive vigor among even the most powerful enterprises.2 I too join the growing consensus that regards reforms in private treble damage enforcement as timely, since such reforms would not only diminish the sway of juries, but would also avert other excesses that might otherwise warrant cutting substantive antitrust doctrines to the bone.

Reassessment of International Application of Antitrust Laws: Blocking Statutes, Balancing Tests, and Treble Damages

Reassessment of International Application of Antitrust Laws: Blocking Statutes, Balancing Tests, and Treble Damages

A Simple Model of Imperfect Competition in which Four are Few but Three are Not

This paper presents a model of imperfect competition in which the likelihood of collusion is not a monotonically decreasing function of the number of firms. Other notable oligopoly models predict a monotonic relationship. The difference in predictions is a consequence of our assumptions that firms either explicitly collude or instead engage in Cournot behavior and that explicit collusion, if detected, is punished with fines and damages. THERE ARE few notable models of the formation or maintenance of collusive agreements. Two particularly interesting ones are those of Stigler [1964] and Selten [1973]. Stigler considers only a certain aspect of cartel maintenancedetecting cheating-while Selten considers only certain aspects of cartel formation. Their models produce the intuitive result that the likelihood of successful collusion is a monotonically decreasing function of the number of firms. We present a simple model of cartel formation and maintenance that produces a different result; it is quite possible for the likelihood of collusion to increase as the number of firms increases. An important, realistic feature of the model (at least for the United States), which distinguishes it from those of Stigler and Selten and which is partially responsible for its counterintuitive result,-is that collusion, if discovered, is punished through fines, imprisonment, and treble damage awards. Consider a simple, static model with n identical firms that either colLude explicitly and set the monopoly quantity or instead engage in Cournot behavior.' If the firms collude, they (as a group) incur costs of forming and maintaining their agreement, M, which are an increasing function of n. In addition, there is some probability, 0, that the cartel will be detected,2 in which case each firm in the cartel must pay a fixed fine, F, and the cartel must * The views expressed here are not necessarily those of the US Department of Justice. 1 To make the model very simple, we assume all-or-nothing cartels, that is, all firms are in any cartel. The specific assumption of Cournot behavior is not critical. The same basic results are obtained provided that the alternative to explicit collusion is not competition and provided that, absent explicit collusion, the fewer the number of firms, the greater is the difference between the equilibrium price or quantity and the competitive price or quantity. 2For simplicity, we assume that 0 is a constant. It may be more plausible that 0 is an increasing function of n. The more firms there are in a cartel, the more likely it may be that one will inform on the cartel. Increasing the number of firms in a cartel also increases the effort necessary to maintain cartel discipline and, therefore, may increase the likelihood that those efforts will attract the attention of enforcement authorities. If 0 were assumed to increase significantly as n is increased, the probability of collusion would be a monotonically decreasing function of n for most, perhaps all, parameter values.

The Scope of Liability for Antitrust Violations

A firm violates the antitrust laws; another firm suffers injury. Under what circumstances may the second firm recover treble damages under Section 4 of the Clayton Act.' This, in its starkest form, is the problem of defining the scope of liability for antitrust violations,2 and it has commanded the attention of the federal courts in a variety of contexts in recent years. Reasons for the attention are not hard to find. Existing definitions of substantive antitrust liability bring many efficient business arrangements arguably within the prohibition of the antitrust laws.3 Consequently, firms quite rationally employ a rent-seeking antitrust strategy, whose aim is not only to exact treble damages, but to inhibit rivalry and efficient distribution practices.4 At the same time, the complexity, duration, and expense of antitrust litigation

Efficient Assignment of Rights to Sue for Antitrust Damages

DIRECT purchasers of price-fixed goods now have the right to sue for treble damages based the full overcharge. The Supreme Court established this legal rule in two decisions, Hanover Shoe, Inc. v. United Shoe Machinery Corp. and Illinois Brick Co. v. Illinois.2 Both cases deal with the fact that illegal overcharges may be on from direct purchasers to indirect purchasers further down the distribution chain. The defendant in Hanover Shoe claimed that the plaintiff, a direct purchaser, was not injured because it passed overcharges to indirect purchasers. Indirect purchaser plaintiffs in Illinois Brick claimed damages from overcharges passed to them by direct purchasers. The Supreme Court rejected both uses of passing on-the defensive use in Hanover Shoe and offensive use in Illinois Brick.3 This legal rule has been debated vigorously. Harris and Sullivan,4 the severest critics, argue that the rule does not deter horizontal conspiracies due to the weakness of direct purchaser incentives, that it is unfair, and that alternative rules splitting damages based the extent of passing

State Antitrust Enforcement: Its’ Evolution and Future Direction

State antitrust enforcement went through several dramatic changes from 1974 to 1982. This article charts its growth and decline during this period by measuring the number of actions filed by state antitrust programs, their funding and staffing. These measures indicate that state antitrust activity rapidly increased from 1974 to 1980 but has declined during the eighties because state antitrust programs lost federal funding and political support. This article also considers the changing focus of state antitrust enforcement by examining the type of defendant and substantive violation prosecuted, client represented, and relief sought in state antitrust actions. This examination shows that state antitrust enforcement shifted from multidistrict, treble damage suits against large, out-of-state enterprises to actions against small, in-state businesses. To explain the political and fiscal forces that have shaped state antitrust enforcement, this article compares antitrust enforcement in states with appointed attorneys general to that in states with elected ones, and among states with different funding sources for their programs. Based on these comparisons, it is argued that state attorneys general can overcome state antitrust's present political and fiscal crisis by bringing more consumer damage (parens patriae) suits and using revolving funds to finance enforcement. It is argued that state antitrust programs will make their greatest contribution to society by maximizing consumer welfare. They can do this by bringing actions against local price-fixers and bid-riggers, policing anticompetitive state regulation, and educating small businessmen and consumers about antitrust. This article offers suggestions for ensuring the long-term fiscal stability of state antitrust, including cooperative efforts designed to increase enforcement efficiency and modifications in revolving funds. The article concludes with the observation that state antitrust programs have provided a unique brand of locally oriented enforcement and this contribution will be lost unless state attorneys general act to achieve political and fiscal stability for these programs.

Standards: Antitrust ruling chills standards setting: A U.S. Supreme Court ruling has clouded standards setting with the threat of antitrust liability

The Supreme Court recently ruled that the American Society of Mechanical Engineers was responsible for the actions of its members who used the ASME standards-interpretation operation to violate antitrust law. The Court approved the assessment of treble damages — more than $7 million — against the ASME, which, it determined, had granted the members involved “apparent authority” to act on its behalf. The members issued an interpretation of a standard, and their interpretation was used by one company to frustrate the sale of a competing device.

Are treble damages double damages?

The antitrust laws provided for treble damages, a penalty that encourages wronged parties to bring private suit on a matter presummedly vested with a public interest. This paper demonstrates that as interpreted by the courts the treble damage penalty is only double the full welfare loss suffered by actual and potential customers if three conditions are met: 1) the commodity is produced under constant cost conditions, 2) the monopoly price is set so as to maximize profits, and 3) the demand curve is linear. The implications of relaxing these assumptions are evaluated. The analysis is illustrated with data for Wall Products Co. v. National Gypsum, 1971.

Pfizer Inc. et al. v. Government of India et al.

Sovereign immunity — Foreign States — Capacity to sue in the United States courts — Whether a foreign State a “person” entitled to sue for treble damages under the United States antitrust laws — Immunity from suit of foreign State — Effect of Foreign Sovereign Immunities Act 1976 — The law of the United States

Unestablished Businesses and Treble Damage Recovery under Section Four of the Clayton Act

Unestablished Businesses and Treble Damage Recovery under Section Four of the Clayton Act

Negative Effects of Treble Damage Actions: Reflections on the New Antitrust Strategy

Since the passage of the Sherman Act' in 1890, private parties have had the right to seek monetary compensation for injuries to business or property resulting from antitrust violations.2 By allowing plaintiffs to treble their damage awards, Congress sought to provide the private sector with the incentive to function as a self-policing system3-the conventional assumption being that the plaintiff's sole objective in a treble damage action would be to extract monetary compensation from the defendant.

United States: Supreme Court Decision in Pfizer, Inc., et al. V. Government Of India et al. (Right of Foreign Nations to Sue in U.S. Courts under Antitrust Laws)

A foreign nation otherwise entitled to sue in the courts of this country held to be a "person" within the meaning of §4 of the Clayton Act and thus to be entitled to sue for treble damages under the federal antitrust laws to the same extent as any other plaintiff. Pp. 3-11.

The Class Action as an Antitrust Enforcement Device: The Chicago Experience (II)

Private treble damage actions have long been recognized to play a major role in antitrust enforcement. The present study evaluates the impact of the class action on private antitrust enforcement in one large commercial district, the Northern District of Illinois. Data were collected through attorney interviews and from the docket books and files of the clerk of the court on all antitrust treble damage actions not transferred to some other district that were filed from the inception of the amendment to rule 23 on July 1, 1966, through June 30, 1973.

An Economic Analysis of Policies Protecting Small Business in the Milk Industry

Regulatory activity to maintain the status of the independent milk company as a viable competitive force in the milk industry has been a central focus of regulatory policy since the 1930's. Some authorities question the degree of emphasis on preservation under the law, but most feel that there is an important element of protection embodied in regulatory activity affecting the industry. We feel that this aspect of the law is important and is the focus of this article.Legal protection of the independent dairy is afforded from three sources. The Robinson-Patman Act, which prohibits firms from discriminating in price where the effect may be to substantially lessen competition, has been enforced extensively by the Federal Trade Commission (FTC) on behalf of independent milk companies. For example, of 53 complaints filed by the FTC from June 1950 to June 1964, nine were against dairy companies. Independent firms have protected their own position under the law in treble damage private litigation. As a group, the national and regional dairy concerns have been involved in almost continuous treble damage litigation on charges of discriminatory pricing in recent years.

Procedural Directions in Antitrust Treble Damage Litigation: An Overview of Changing Judicial Attitudes

Procedural Directions in Antitrust Treble Damage Litigation: An Overview of Changing Judicial Attitudes

Measuring Damages in Federal Treble Damage Actions

Measuring Damages in Federal Treble Damage Actions

Franchisor Standing to Sue in Treble Damage Actions

Franchisor Standing to Sue in Treble Damage Actions

Treble Damage Actions for Violations of Section 7 of the Clayton Act

Treble Damage Actions for Violations of Section 7 of the Clayton Act

The Prima Facie Effect of Federal Trade Commission Orders in Clayton Act Treble Damage Actions

The Prima Facie Effect of Federal Trade Commission Orders in Clayton Act Treble Damage Actions

Consumers and Antitrust Treble Damages: Credit-Furniture Tie-Ins in the Low Income Market

Consumers and Antitrust Treble Damages: Credit-Furniture Tie-Ins in the Low Income Market