How antitrust law changed from ex post regulation of harm to ex ante prevention of risk
The history of the modern administrative state illustrates the increasingly prominent role that future states of affairs play in present deliberations. During the 1960s, Congress tasked a number of federal agencies (e.g., EPA, OSHA) with preventive policy making.
Instead of regulating technologies that were known to be harmful, agencies now were charged with identifying and controlling hazards that could, if unchecked, pose serious threats to health, safety, and the environment. Risk (that is, the possibility of harm), rather than harm itself, became the phenomenon that Congress asked the agencies to guard against. (Sheila Jasanoff, Science At the Bar: Law, Science, and Technology in America (Harvard University Press, 1997)).The history of the antitrust treatment of mergers provides a vivid illustration of how the law shifted its focus from the ex post regulation of harm to the ex ante prevention of risk. With the Celler-Kefauver amendments to §7 of the Clayton Act, Congress tasked the agencies and the courts with preventing increased market concentration in its incipiency. The subsequent passage of the Hart-Scott-Rodino Act in 1976 transformed merger practice from ex post litigation into a forward-looking regulatory discipline. That latter shift was so momentous, that the Supreme Court has not decided a merger case since 1975. The change from ex post regulation of harm to ex ante prevention of risk also contributed significantly to the rapid assimilation of economics into antitrust jurisprudence. Faced with the task of having to make predictions about post-merger prices, antitrust courts and agencies turned to economic science for help. The structural presumption is a direct outgrowth of that attempt to deal with highly contingent future events (post-merger prices) on the basis of presently observable facts (number of competitors in the pre-merger market). The legal inference that few competitors will engage in oligopolistic behavior, which in turn will lead to higher prices was underwritten by then state of the art economic science (“structure-conduct-performance paradigm”).
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October 25th, 2007 at 5:08 pm
[…] How antitrust law changed from ex post regulation of harm to ex …The history of the modern administrative state illustrates the increasingly prominent role that future states of affairs play in present deliberations. During the 1960s, Congress tasked a number of federal agencies (eg, EPA, … […]
November 11th, 2007 at 3:50 pm
[…] Brett Murphy wrote an interesting post today onHere’s a quick excerptHow antitrust law changed from ex post regulation of harm to ex …The history of the modern administrative state illustrates the increasingly prominent role that future states of affairs play in present deliberations. … […]