The general agreement among scholars and professionals in the defense of competition is that the resources are important enough to be an important part of how an antitrust case is organized and processed. In cases of monopolization, resources are almost always adapted to the specific facts of a case and can be very difficult to construct. These resources must be adapted to the damages that the prosecution seeks to prove and must provide a real benefit for consumers. However, history shows that many promulgated remedies have had little positive impact, at least in the short term. Even the structural remedies, such as the break-ups of the company, did not achieve the expected results in cases such as Standard oil Y American tobacco. There is substantial evidence that subsequent market forces, including disruptive competition, are one of the most important factors in the eventual return of markets to a competitive state. This is more true in industries with rapid technological change.
Antitrust remedies they are the subject of many academic papers, studies and discussions. In 2017, the FTC published a report He tried to determine how the agency went about fusion remedies and what lessons can be learned from their successes and failures. An idea that is common in literature and jurisprudence is that resources must be adapted to solve the identified damage. The DOJ fusion remedy guide declares that a "remedy carefully adapted to competitive damage is the best way to ensure effective relief". International Competition Network Guide Similarly, "remedies must solve the competition problems to which the merger gives rise". The Circuit D.C. in Microsoft Explain "We note again that (the relief) must be adapted to fit the evil creating the occasion for the remedy.
The remedies should also be aimed at improving things for consumers. This means better quality, choice and prices. It has to create some social good, otherwise what is the point? These ideas may seem obvious, but building remedies can be a challenge. First the behavior or the harmful conditions must be identified, and then the behavior must be stopped and solutions found to return the market to a more positive state (ideally to the state in which it was before the behavior, but this is not always realistic). This is not always easy, and can be problematic when performers get incorrect remedies. This is the reason why academics and professionals of the competition spend a lot of time discussing the remedies and how to formulate them.
In fact, much of the literature on remedies discusses its flaws. Scholars and professionals have written about remedies that it was not far enough, it was too faror failed to address the problem. Some have been critic of remedies That was beyond the scope of the defined problem. Others have accused the government of being unable to "capture the essentials of the market that led to concentration in the first place" in the elaboration of resources. Robert W. Crandall, an economist who studied remedies, famous that "the government often lags behind in the market to find ways to increase competition".
One of the most infamous examples of a bad competition law is the continuing requirement of the European Commission and the Korea Fair Trade Commission for Windows to produce and market a version of Windows without Windows Media Player and Windows Media Center. This version is called Windows "N", and you can still find copies of Windows 10 N (or Windows 10 KN in Korea) available for purchase. There are several important problems with this remedy. There was no requirement to offer Windows N at a different price, and the N editions were offered at the same price as normal Windows. Worse still, like R. Hewitt Pate Explain"Windows Edition N not only lacks a media player application that can run as a standalone application to enjoy DVD, music and video, but also lacks the functionality of the platform that integrates WMP code into other applications and Internet resources. " Windows 10, this means that "Cortana, Windows Hello and the PDF display in Edge will not work." Windows N has been a huge failure, and many computer experts (such as How-To Geek) We recommend that consumers avoid the version completely. If someone takes it by mistake, Windows offers a free multimedia feature package to restore these applications.
After the victory of the government in Standard oil The company was dissolved, followed by a significant increase in gas prices. This led the FTC to issue a paper Explaining why this happened. One of the main causes seems to be that when they dissolved the company, the new smaller business units were geographically isolated and did not really compete in the territories of the other party. The FTC was forced to suggest new remedies to fix the original remedy, including the suggestion of legislation to abolish common property. In addition, the role of Crandall sample that Standard Oil was already losing market share before dissolution. This was due to the discovery of new sources of oil not controlled by Standard Oil and the rapid change to gasoline as cars became popular. Crandall believes that Standard Oil would have had trouble maintaining its position in the market regardless of its dissolution. Unfortunately, Crandall's data suggest that production fell after the dissolution. However, there were many other factors at play, including the start of World War I in 1914, and it is difficult to trace the results of the dissolution. Crandall believes that, in the best of cases, the dissolution had no effect, and that changing market conditions would have driven competition regardless of the remedy.
The American Tobacco Trust faced a series of state actions in the 1890s, but it was not until 1908 that the US government. UU lawsuit filed Dissolve it completely. The result was a decree, effective as of 1912, which created three companies: American Tobacco, P. Lorillard and Liggett and Myers. Large shareholders continued to have substantial positions in the three companies. This was essentially an oligopoly of three companies. These companies largely avoided price competition and, instead, fought for a market share through greater publicity and brand building. The price of most brands was falling before the decree, but then went up afterwards. Prices of "TurkishThe brands continued to fall after the decree, but at a somewhat reduced rate. R.J. Reynolds, which was not owned by American Tobacco, became the industry's price leader with the introduction of its successful Camel brand in 1913, and this led to some price volatility. In general, Crandall data It shows that the industry avoided most of the price competition, did not pay farmers better and had approximately the same rate of profit as before the decree. The returns to shareholders were largely intact. Crandall believes that the decree's main impact was to divert substantial resources from advertising, while having little impact on prices.
The former head of the Antitrust Division William Baxter, who oversaw the sale of AT & T, believed that A remedy must end the behavior that has allegedly harmed. consumer welfare and that is the basis for a finding of responsibility, no more, no less. Baxter also stated that, regardless of liability, if "there is no assurance that adequate relief can be obtained," then the government must question the value to consumers of prosecuting the antitrust case in question. The experts Howard Shelanski and Gregory Sidak called to this "Baxter's axiom" and believed that it should serve as the Hippocratic oath for antitrust agents.
Most academics seem to agree that remedies are extremely challenging, and that cases should be organized around possible relief. Interestingly, this means that, like Spencer Weber Waller notes, doing nothing is a viable option. This was the case of IBM. The government spent 13 years trying to continue its case against IBM only to discover that the market had changed. IBM had gone from being a monopoly mainframe vendor to just another competitor of personal computers. The same day that Baxter announced the sale of AT & T, the IBM case ended. This also happened with the American steel, although not for lack of effort. The government lost its case against the company in a Supreme Court of 1920. decision. However, time eroded its power through the development of new metals and foreign imports.
Another important problem with remedies is problems with causality. Today the Microsoft The case is often presented as an example of the positive change that a case of monopolization can bring. But in 2012, anti-monopoly scholar Peter Carstensen described Microsoft as:
perhaps the best illustration of the inability to organize a challenge to a major monopoly over potential relief. The case of the government was transformed over time from a linkage case narrowly focused on the Internet browser market to one oriented to the general existence of Microsoft as a entrenched monopolist. But because the question of the remedy was not fundamental to the development of that case, when the time came, the government had not set a record to prove the merits of its proposed relief.
The remedies in Microsoft It went from a proposed break to a variety of behavioral remedies enacted in the United States and the European Union. Some of these, as noted above, fell flat. However, there are few who believe that Microsoft still has the power it once had, and faces stiff competition in markets it did not have before (such as browsers). Carstensen, an advocate of structural remedies, admits that while he believes that structural remedies are associated with positive long-term effects, "(t) the term" associated "is used in an advisable manner because the causality is clearly complex, and the The role of various economic and social forces are not well defined in terms of their contribution to the final results. "
The study of monopolization remedies shows that most are made to measure, are best processed when the case is organized taking into account the remedies and often fail (at least in the short term). However, most industries eventually become more competitive or at least experience later periods of competitive health. A common thread in markets that became healthy (or healthier) after a remedy is that the market usually played an important role in driving a new competition. This was the case when competition for personal computers exceeded the dominance of the IBM mainframe; when the easier online distribution generated new competition for Internet browsers; when the technology was changed, the competition from the operating system to the mobile was changed, where Microsoft was delayed; and when vaping (although it may not be socially preferable) drove a new competition against tobacco.
There is also another way for successful remedies. In some cases, the government has created successful remedies by establishing control over the abuse of market power, available to market participants, without destroying the useful elements of a business model. The best example of this is the musical consent decreed with ASCAP and BMI (discussed here). These decrees allow normally illegal coordination between competitors due to the unique characteristics of the music industry. But they also give the market protections against the abuse of that power.