The use of mainstream economic theory in the most recent decades of antitrust enforcement has served to focus analysis of conduct potentially harmful to consumers on issues of efficiency and loss of social welfare. Any discussion of other motivations for antitrust enforcement, including concern about concentration of political power into the hands of a few large (multinational) corporations, has fallen by the wayside. While this latter concern has become the stuff of political protests, antitrust has turned blind to this very real concern.

On the other hand, despite claims that political power no longer influences antitrust enforcement on any significant level, politics appears to play a significant role in the enforcement of antitrust laws. For example, a corporate constituent might encourage a Senator to lead a charge against an antitrust enforcement agency's budget in order to reduce that agency's ability to litigate against that corporate constituent. A case won during a previous presidential election (apart from remedy considerations) might turn out to be a substantial loss once political appointees within an enforcement agency are replaced. The enforcement agency and the defendant may even go further, and join forces to prevent private parties from bringing enforcement actions against the corporate constituent. If this sounds too far-fetched, keep in mind that these are all examples directly stemming solely from the recent Microsoft case.2

The roles of firm size and corporate growth are directly related to political power. Large firms in relatively important sectors of the economy are very capable of amassing wealth and political support.3 Their relative size also enables them to garner serious media attention, particularly in times of economic instability. As a result, larger firms4 in important sectors of the economy are potentially capable of altering how antitrust laws are enforced in their industries, while smaller firms may not, even where the two firms have identical market shares and are engaging in relatively similar conduct.5

There are other serious consequences that arise when large firms wield political power in the antitrust arena. Enforcement agencies may recoil from bringing actions that could jeopardize their budgets, or they may be required to curtail enforcement if their budgets have been slashed. This potential for enforcement only in realms that are politically unpopular6 may cause harm to the economy in general and the competitive process within an industry in particular. In short, should the antitrust enforcement agencies be politically thwarted or discouraged in their efforts to increase efficiency in an industry by eliminating the incentive or ability of particular firms within that industry to engage in conduct that decreases efficiency in the market, then political investments by large firms engaging in anticompetitive conduct can ensure that the firm maintains or enhances its market power within that industry, decreasing efficiency.

Finally, there is the potential that antitrust jurisprudence will be harmed. If antitrust ignores the realm of political power, but a unidirectional influence is exerted from the political sphere, then antitrust enforcement is not so "scientific" as it might be portrayed. Indeed, the application of economic "science" to antitrust enforcement may yield entirely different outcomes depending upon what political force is leading the agency, Congress, and the presidency.

This essay discusses the political nature of antitrust. First, the essay addresses the nature of the antitrust laws and why size is of little importance to the determination of whether an antitrust violation exists. The essay then discusses the Microsoft case as an instance in which political influence has swayed antitrust enforcement and has caused harm to consumers. The essay then suggests that the solution to such political interference in the enforcement process is difficult to find. Nonetheless, the discussion does point to a need to reincorporate more traditional (and historical) notions of antitrust—that is, that antitrust should examine more than efficiency considerations, as realms such as politics that are viewed to be beyond the scope of antitrust do indeed influence markets in ways that decrease social welfare.

The Historical Role of Firm Size

Traditional analyses of the role of firm size in antitrust have considered implications much broader than mainstream notions of economic efficiency. In particular, most historical approaches to antitrust considered the social, political, and distributional ramifications of firm size upon the economy. In these paradigms, efficiencies were not a defense, as what was at stake in the economy was more than mere efficiency, but rather notions of democracy and fairness. It is useful to explore the foundations of these "other" concerns of policy makers to determine whether these concerns are still relevant.

Brandeis and the "Curse of Bigness"

The most extreme historical position taken concerning firm size was Justice Brandeis' view that firm size was indicative of past transgressions by the firm against the economy, the political process, and consumers. As Thomas K. McGraw has stated, "Early in his career, Brandeis decided that big business could become big only through illegitimate means. By his frequent references to the 'curse of bigness,' he meant that bigness itself was a mark of Cain, a sign of prior sinning."7 The concern of Brandeis was that businesses gained size not due to efficiency,8 but rather due to conduct injurious to consumers. However, the result of the conduct in question was not solely economic, and the conduct giving rise to firm size could also alter the political process.9 As one commentator has stated:

Brandeis helped pass the Sherman Act and the Clayton Act, which today remain the principal embodiments of national antitrust policy. . .Brandeis believed that the antitrust laws were more about ethics and equality than efficiency. He was greatly concerned about small competitors and the way they were treated in the marketplace. He saw the concentration of power in the hands of the few as unfairly choking off opportunity for the many. He was also concerned with social and political effects because he considered the concentration of power to be anti-democratic.10