Creating competition policy: Betty Bock and the development of antitrust institutions

Antitrust Law Journal

Volumn 66, Issue 1, 1997, Pages 231-244

  Kovacic, William E ^a  

^a GEORGE MASON UNIVERSITY   (United States)

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EID: 21944437198     PISSN: 00036056     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (53)

1. See Eleanor M. Fox, Betty Bock: A Celebration, ANTITRUST, Summer 1995, at 45.
2. Through 1996 some 69 countries had adopted competition laws. See Mark R.A. Palim, The Growth of Competition Law in the Global Economy 185-205 (1997) (unpublished doctoral dissertation, Department of Economics, George Mason University).
3. Georgia's antitrust law is described in William E. Kovacic, Recommended Action Plan for Implementing Georgia's Antimonopoly and Consumer Protection Laws (1997) (Center for Education and Policy Reform Analytical Report No. 9).
4. 310 U.S. 150 (1940).
5. 221 U.S. 1 (1911).
6. 148 F.2d 416 (2d Cir. 1945).
7. By the 1930s and 1940s, antitrust was a major practice area for many leading law firms whose namesakes achieved prominence as antitrust litigators. After representing the United States as Attorney General in Standard Oil Co. v. United States, 221 U.S. 1 (1911), and United States v. American Tobacco Co., 221 U.S. 106 (1911), Cornelius Wickersham of Cadwalader, Wickersham & Taft devoted much of his practice to counseling defendants in antitrust matters, such as Paramount Famous Lasky Corp. v. United States, 282 U.S. 30 (1930). John Cahill of Cahill, Gordon & Reindl and Howard Ellis of Kirkland & Ellis represented the defendants in Associated Press v. United States, 326 U.S. 1 (1945). Robert Swaine of Cravath, Swaine & Moore and Luther Day of Jones, Day, Reavis & Pogue represented defendants in Hartford-Empire Co. v. United States, 323 U.S. 386 (1945). William Donovan of Donovan & Leisure represented one or all of the principal defendants in Appalachian Coals, Inc. v. United States, 288 U.S. 344 (1933) and United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940). John W. Davis of Davis, Polk & Wardwell represented defendants in many of his firm's high profile antitrust cases, including Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359 (1927).
8. Betty Bock, An Economist's View of the Supreme Court's Recent Antitrust Decisions, 47 ANTITRUST L.J. 799, 831 (1978) [hereinafter Economist's View].
9. Id. at 832.
10. See Betty Bock, An Economist Appraises Vertical Restraints, 30 ANTITRUST BULL. 117, 137 (1985) [hereinafter Vertical Restraints]) ("The fact is that no conspiracy can last without government, or possibly dominant company (companies) coercion . . . . The conspiracy condition can have significant economic reality only if the products of the conspirators are reasonably homogenous . . . .").
11. Betty Bock, An Antitrust Blueprint for the 1980s, 55 N.Y.U. L. REV. 574, 578-79 (1980) [hereinafter Antitrust Blueprint]. Bock's criticism of proposals in the 1960s and early 1970s to control conglomerate mergers was their failure to take a "long-range view of markets for going companies." She foresaw no inevitable progression toward establishment of a small number of large conglomerate enterprises. Instead, firms would expand and contract as they searched for combinations of assets that they could manage profitably.
12. Betty Bock, Remarks, in THE CONGLOMERATE CORPORATION - AN ANTITRUST LAW AND ECONOMICS SYMPOSIUM 349, 354 (Roger D. Blair & Robert F. Lanzillotti eds., 1981).
13. Bock, Antitrust Blueprint, supra note 11, at 576.
14. 429 U.S. 477 (1977).
15. Id. at 488.
16. Bock, Economist's View, supra note 8, at 842.
17. id. at 829.
18. Id. at 840; see also Betty Bock, The Shifting Vocabulary of Antitrust - Legal Linguistics in a Period of Change, 36 CASE W. RES. L. REV. 327, 339-41 (1985) (applauding analytical approach adopted in Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1 (1979)).
19. BETTY BOCK, RESTRUCTURING PROPOSALS: MEASURING COMPETITION IN NUMERICAL GRIDS 1 (Conference Board Report No. 619: Jan. 1974) [hereinafter RESTRUCTURING PROPOSALS].
20. 370 U.S. 294 (1962).
21. 410 U.S. 526 (1973).
22. 384 U.S. 563 (1966).
23. 15 U.S.C. § 2.
24. See infra notes 31-33 and accompanying text (discussing legislative deconcentration measures); William E. Kovacic, Failed Expectations: The Troubled Past and Uncertain Future of the Sherman Act as a Tool for Deconcentration, 74 IOWA L. REV. 1105, 1106-09 (1989) (recounting Justice Department and FTC monopolization cases of the 1960s and 1970s involving dominant firms and oligopolies).
25. See Bock, RESTRUCTURING PROPOSALS, supra note 18, at 7 ("[E]xisting and proposed figures on concentration are bare numbers generated through statistical systems not primarily designed to measure competition in markets.").
26. Id. at 7 ("Standardized structural data cannot . . . constitute real indicators of competi-tive imperatives, unless they are surrounded by so much additional information that the data represent only a few of a series of analytic statements about a market.").
27. See id. at 8: [Understanding of how corporations, markets, and industries function should surface through relevant research concerning specific corporate clusters and the changing markets which their operations create. The realities of competitive life are more severe, less consistent, and more difficult to subsume in numerical grids than observers may suppose. To place analytic trust in number-grids as surrogates for understanding of the significance of competitive variables in differing markets can distort rather than clarify competitive policy.
28. See id. at 2: From the beginning, the words of the [merger] law . . . required predictions. But the emergence of market share and concentration data as the basis for such predictions was not a foregone conclusion - since such numbers do not have an independent objective existence, but are dependent variables that result from prior analysis of the scope and boundaries of the markets an acquisition may affect.
29. Bock unintentionally helped establish submarkets as tools of antitrust analysis. In 1960 she prepared a summary of criteria that lower courts used to delineate product and geographic markets in merger cases. See BETTY BOCK, MERGERS AND MARKETS: AN ECONOMIC ANALYSIS OF CASE LAW (National Industrial Conference Board 1960). In Brown Shoe Co. v. United States, 370 U.S. 294, 325 n.43 (1962), the Supreme Court cited her survey as confirming the general acceptance of this technique. As the following passage shows, Bock neither anticipated nor desired this result: I have always felt that I personally am unduly guilty of having an influence on the Supreme Court with respect to submarket analysis and I have suffered for my sins. Where I was quoted concerning criteria for submarkets in Brown Shoe, I had simply been summarizing the lower court and Federal Trade Commission decisions prior to Brown Shoe, because there had been no Supreme Court decisions under Section 7 of the Clayton Act at the time I was writing. Somehow, the Supreme Court got the notion that I had enunciated standards. In any case, I think that where you want to show an acquisition may substantially lessen competition, you must show where the effect will arise and therefore you need to identify the market affected.
30. Bock, Economist's View, supra note 8, at 848.
31. The Supreme Court's focus on market shares and structural factors "provided a judicial by-pass of more complex analytic information on economic performance." Bock, Restructuring Proposals, supra note 18, at 2.
32. See HEARINGS ON S. 1167 BEFORE THE SUBCOMM. ON ANTITRUST AND MONOPOLY OF THE SENATE COMM. ON THE JUDICIARY, 93d Cong., 1st Sess. 3 (1973) (reprinting Industrial Reorganization Act). The bill created a rebuttable presumption of monopoly power for the chemicals and drugs, electrical machinery and equipment, electronic computing and communications equipment, energy, iron and steel, motor vehicle, and nonferrous metals industries when rates of return and four-firm concentration ratios exceeded specified levels.
33. See also Harlan M. Blake, Legislative Proposals for Industrial Concentration, in INDUSTRIAL CONCENTRATION: THE NEW LEARNING 340 (Harvey J. Goldschmid et al. eds., 1974) (discussing Industrial Reorganization Act).
34. S. 3429, 94th Cong., 2d Sess., 122 CONG. REC. 13,872 (1976); See also Alfred J. Daugherty, Jr. et al., Elimination of the Conduct Requirement in Government Monopolization Cases, 37 WASH. & LEE L. REV. 83 (1980) (discussing legislative and other "no-fault" monopolization proposals).
35. See PETROLEUM INDUSTRY COMPETITION ACT OF 1976, S. REP. No. 1005, 94th Cong., 2d Sess. 161 (1976).
36. See Betty Bock, The Limits of Words and Numbers: Be Careful When Wandering at the Brink of a Precipice Without an Experienced Guide, in BUSINESS DISCLOSURE: THE GOVERNMENT'S NEED TO KNOW 264 (Harvey J. Goldschmid ed., 1979).
37. Bock, Antitrust Blueprint, supra note 11, at 576.
38. Bock, Antitrust Blueprint, 576. Id.
39. Id. at 577.
40. Bock preferred the term "vertical agreements" to the term "vertical restraints," warning that "a prejudicial vocabulary puts the conclusion cart before the analytic horse." Bock, Vertical Restraints, supra note 10, at 118.
41. Id. at 140.
42. Bock, Economist's View, supra note 8, at 845-46.
43. No. 95-871, 1997 U.S. LEXIS 6705 (U.S. Nov. 4, 1997).
44. The author is the Program Director for The Conference Board's Annual Antitrust program created by Betty Bock.
45. See Symposium, Consent Decrees: Antitrust Enforcers as Regulators, ANTITRUST, Fall 1995, at 4-27.
46. Betty Bock, Ethical Considerations for an Antitrust Economist: An Economist's View, 48 ANTITRUST L.J. 1837, 1876 (1979) [hereinafter Ethical Considerations].
47. Id. at 1876.
48. Bock emphasized her abiding interest in applications of theory to facts: I have benefited often from being called an economist. But I have never practiced the art of economic generalization. I have instead been concerned with how specific companies and markets operate, with what specific received data on competition mean, and with the economic development of antitrust law. Id. at 1875. See also Betty Bock, The Relativity of Economic Evidence in Merger Cases - Emerging Decisions Force the Issue, 63 MICH. L. REV. 1355, 1367 (1965) ("[I]f the economist is to achieve complementary professional status with the attorney who takes ultimate professional responsibility for a case, he must gain his position through continuing study of the substantive requirements of the law and of the facts concerning how competition differs in different markets.").
49. Bock, Vertical Restraints supra note 10, at 118.
50. Bock, Ethical Considerations, supra note 43, at 1876.
51. Id. at 1879. Bock urged humility upon economists who serve as experts in antitrust litigation: What is my approach to the relations between knowledge and ignorance? Am I confident in stating the boundaries of my skills and information - and am I right? Do I understand that descriptions of the competitive process are always riddled with gaps? Do I know the difference between necessary and contingent ignorance so that I can live with the first while seeking to reduce the second? . . . Do I avoid using theory as if it were fact - or probable fact? Id.
52. Bock, Vertical Restraints, supra note 10, at 118.
53. Bock also was the FTC's economic liaison to the Attorney General's National Committee to Study the Antitrust Laws and was a principal drafter of its report. See REPORT OF THE ATTORNEY GENERAL'S NATIONAL COMMITTEE TO STUDY THE ANTITRUST LAWS iv (1955).