There is a lot to fix in US antitrust enforcement today

[Op-ed] The court decision allowing AT&T to acquire Time Warner is an example of the inability of our current system of courts and enforcement to prevent the decline in competition in the modern US economy. In the case of that merger, the Antitrust Division of the US Department of Justice gets credit for making an attempt to block what it viewed as an anti-competitive transaction. What’s more, that view proved prescient after the now-merged firm almost immediately raised prices after executives testified that the synergies from the deal would immediately cause lower prices. The court decision of US District Judge Richard Leon demonstrated a lack of understanding of the markets, the concept of vertical integration, corporate incentives, and the intellectual exercise of forecasting what the unified firm would do. And so, not surprisingly, it produced a poor decision. The Supreme Court decision in Ohio v. American Express Company further weakens antitrust enforcement by complicating the analysis and raising the standard of proof for platform business cases. Articles in a recent Yale Law Journal identify the types of cases the agencies should be pursuing such as anti-competitive most-favored-nation clauses, laying out the rationale for the agencies’ bringing cases involving harm to sellers, including employees, as this is a source of anti-competitive harm as much as higher prices. 

[Fiona M. Scott Morton is the Theodore Nierenberg Professor of Economics at the Yale University School of Management]