Posner's Program for the Antitrust Division: A Twenty-Five Year Perspective

Abstract

This article, published in 1995, reconsiders Richard A. Posner, A Program for the Antitrust Division, 38 U. Chi. L. Rev. 500 (1971), twenty-five years after its publication. Posner argued that the Antitrust Division of the U.S. Department of Justice should try to maximize the efficiency of antitrust enforcement by discovering and implementing those policies whose net social product is largest. His guide for identifying those policies was the consensus of opinion among mainstream economists. Applying this standard, Posner argued that the Division should limit its focus to cartels (including tacit collusion), horizontal mergers, and regulatory reform. We argue that the Division has largely followed Posner's approach, although it has essentially abandoned tacit collusion as a basis for liability. One major departure from Posner's prescriptions was the Division's filing of its first case against Microsoft. We suggest that novel theories of anticompetitive exclusion and the theory of network effects, developed since Posner's article, do not justify redirecting public enforcement resources against exclusionary practices.

Keywords: antitrust, cartels, price-fixing, tacit collusion, exclusionary practices, public enforcement

JEL Classification: K21, K42, L12, L13, L41