Carte Blanche: A New Libertarian Approach to Antitrust

David Paul Morris/Bloomberg

The concept of monopolization has crept into public view once more, as Covid-19 restrictions and fears consolidate consumers into the hands of a very few, The Department of Justice sues Google for monopolistic practices, and the EU files antitrust charges against Amazon.

Generally, Libertarians have an undying love affair with free markets. Thus, the thought of antitrust legislation, a form of market intervention, brings out the fervent defenses of a protective lover. Antitrust legislation, most of them argue, is simply a political tool exploited by less competent rivals as well as the self-serving politicians, who wish to appease the lobbyist of those companies or use it for political gain. Even when antitrust enforcement is genuine, the ambiguous definitions of what constitutes monopolistic behavior gives immense power to the arbitrary whims of the translator and leads to more harm than good.

These misgivings aren’t necessarily misplaced. In 1971, President Richard Nixon, as recorded in the Nixon White House Tapes, admitted to using antitrust law for political gain. Nixon conspired to use the threat of an antitrust investigation to coerce ABC, NBC, and CBS to produce favorable news coverage of his administration. Fully aware of his intent, Nixon boasted "Our gain is more important than the economic gain. We don't give a goddam about the economic gain. Our game here is solely political. ... As far as screwing them is concerned, I'm very glad to do it."

More recently a career employee at the Department of Justice, John W. Elias, accused the Trump administration's DOJ leadership of evoking burdensome antitrust investigations against cannabis industry mergers. This was not done because of genuine concerns of impending competition, but to simply encumber - specifically through the issuance of Second Requests - an industry unfavored by the current administration.

However, libertarians are mistaken to vehemently oppose all antitrust legislation. Libertarians' unwillingness to engage with the idea that antitrust can be used as a force for good, negates the possibility of it occurring and feeds an approach that overlooks more practical methods of working towards a more libertarian economy.

For example, instead of using the John Elias case as an example of why antitrust laws shouldn't exist, a more practical approach would be to urge Congress to question why the implementation of burdensome Second Requests by the DOJ are so unrestrained. In a letter introduced to the House Judiciary Committee by Rep. Doug Collins (R-GA), the DOJ’s Office of Professional Responsibility (OPR) admits to the unbounded power of issuing these requests.

The OPR does not deny that there may have been a political motive behind issuing the burdensome requests on the cannabis industry, but instead excuses it as acceptable. In the letter, the OPR states that “based on its review of the law and applicable DOJ rules, policies, and guidelines, OPR agrees with ATR’s interpretation of the latitude it has in issuing Second Requests. Accordingly, even if the whistleblowers’ allegations were true, OPR finds that ATR’s Second Requests would not have violated any relevant laws, regulations, rules, policies, or guidelines.” Now that’s concerning.

One libertarian response, and perhaps a common one, would be to abolish the DOJ’s division of antitrust. But this is implausible. A second, more reasonable and effective approach, would be to revisit what makes this kind of abuse possible: the Hart-Scott-Rodino Antitrust Improvements Act, specifically the clause that allows Second Requests.

The NY Bar Association estimates that when a Second Request is administered it takes an average of three months for a company to comply with the terms as opposed to the 30 day waiting period for mergers under the Hart-Scott-Rodino Antitrust Improvements Act, an amount of time that has the power to break a non-threatening merger deal. Thus, Second Requests act as a punishment for a company that has not yet been found guilty of monopolistic activity. The burden of proof should instead fall on the division of antitrust before following through with a Second Request. Now that is a libertarian response.

Libertarians’ nature evokes the harmonic essence of our world. Thus, libertarians should find a harmony between the lessening government's monopoly on power and the potential monopolization of a market by a corporation. Taking an approach to antitrust that seeks to address the dangerous nuances of antitrust legislation rather than simply abolishing it allows that harmony to flourish.

Thanks to Hollywood's rendition of Atlas Shrugged, many tend to think of libertarians as viewing the world through a binary lens of corporate versus state interests. Yet, the party and its ideas are much more nuanced. Libertarianism is not a lobby for private companies, private companies can be just as corrupt as government entities. Thus, libertarians should not automatically side with corporations on monopoly cases.

As long term lovers of free markets, libertarians should care for the well being of them, and how can a market thrive independently when being held hostage by an oligopoly? While reform is needed, antitrust can still be used to free up markets, promote competition, and protect consumers. Followers of the idea that when corporations get into bed with government, power prevails, libertarians should see the benefit in using antitrust to halt that troublesome behavior. Not to mention, utilizing antitrust can also maximize choice for the consumer. If libertarians want all actions to be voluntary, shouldn’t they want to ensure they aren’t forced to buy one product from one company?

Just as libertarians universalize their ideas of morality to include government, so do they to corporations. If a corporation suddenly began adding poison to their product, killing every consumer on demand, a libertarian would expect the corporation to be held accountable for their actions. This too should be applied to corporations who engage in monopolistic practices.

To be clear, it is not a crime to be successful - but engaging in practices that prevent others from competing against you is an act of aggression and should be treated as such under the non-aggression principle abided to by libertarians.