One of the most consistent attacks levelled at post-Chicago analysis is that in practice, whether or not the economic theory behind it is accurate, it cannot be effectively applied by the courts and/or competition authorities. In fact Shipiro,
62 Pierce63 and Hovenkamp64 all separately claim that post-Chicago should not be applicable, or is not yet capable of being applied within the court room.65
These complaints can be broken down into two basic arguments:
62 Carl Shapiro, ‘Aftermarkets and consumer welfare: Making sense of Kodak’ [1995] 63 Antitrust L.J. 483, 484
63 Richard J. Pierce, ‘Is Post-Chicago Economics Ready for the Court Room? [2001] 69 Geo.Was.L.R. 1103, 1009
64 Herbert Hovenkamp, ‘Post-Chicago Antitrust: A review and critique’ [2001] 2 Colum.Bus.L.Rev. 257, 271
65 It is not clear whether these authors would consider post-Chicago analysis equally as difficult for an authority like the European Commission to apply or whether their criticism relates solely to courts.
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1. Judges and the court system cannot effective apply post-Chicago economics due to their complexity; 66
2. The judicial system is too slow, it cannot analyse anti-competitive behaviour in a time frame that would make it useful to the market.67 Hovenkamp instead praises the Chicago School for producing a doctrine that has a “purity of vision that few legal disciplines ever attain”.68 This attachment to Chicago School principles just because it is pure and undemanding to apply, it is submitted, is misplaced. After all there are many areas of law that could be simplified by removing the complicated parts or ignoring evidential elements that are difficult to ascertain. Contract law for example could become far more pure by simply pursuing the goal of certainty rather than fairness or the intention of the parties, but whether or not that would lead to superior application of the law is highly debatable.
In answer to the first argument it is argued that there are many complex issues that courts are required to consider. There are ways to help courts deal with these matters, not least the use of expert witnesses69 and judicial seminars. Judicial seminars are particularly pertinent as the Chicago School itself chose to use judicial seminars to bring their theories to the attention of the judiciary.70
66 Richard J. Pierce, ‘Is Post-Chicago Economics Ready for the Court Room? [2001] 69 Geo.Was.L.R. 1103, 1109-1110; Herbert Hovenkamp, ‘Post-Chicago Antitrust: A review and critique’ [2001] 2 Colum.Bus.L.Rev. 257, 269
67 Richard J. Pierce, ‘Is Post-Chicago Economics Ready for the Court Room? [2001] 69 Geo.Was.L.R. 1103, 1110-1111, see also Hvenkamp’s suggestion that if behaviour is too complex to be evaluated in a “reasonable time” the courts should not intervene; Herbert Hovenkamp, ‘Post-Chicago Antitrust: A review and critique’ [2001] 2 Colum.Bus.L.Rev. 257, 273
68 Herbert Hovenkamp, ‘Post-Chicago Antitrust: A review and critique’ [2001] 2 Colum.Bus.L.Rev. 257, 269
69 Richard J. Pierce, ‘Is Post-Chicago Economics Ready for the Court Room? [2001] 69 Geo.Was.L.R. 1103, 1109, Pierce does argue that the use of expert witnesses is not
necessarily effective due to the propensity of the experts to give explanations that favour their own their party’s case, or for parties to search for experts who will give explanations
favourable to their case. But it is difficult to see how this is different to the use of experts in any other area of law.
70 David R. Bickel, ‘The Antitrust Division’s adoption of a Chicago school economic policy calls for some reorganisation: but is the division’s new policy here to stay?’ (1983) 20 Hous. L.
Rev 1083, 1101
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The second argument raised is that judicial governance takes too long to moderate dynamic markets, an example given being the IBM case.71 In IBM, the US Department of Justice started a case when IBM was the dominant firm in the computer market. The case was abandoned 13 years later by which time IBM was no longer dominant in that market and even the company’s viability in the market was starting to come into doubt. The suggestion is then that by the time a case has been decided by a court, the market has corrected the deficiency anyway or there has been such a change that the market in question is completely different. In response to this it should be noted that for each case that takes over a decade there are examples of cases that are swiftly and effectively determined and their remedies imposed within a comparatively slight time scale. Microsoft I72 for example was completed relatively swiftly, with the Commission decision73 published in 2004 and the decision of the General Court74 (then CFI) in 2007, once it was completed further issues regarding the deployment and installation of web-browsers were resolved in less than a year, although admittedly this was through the use of commitments rather than court judgement. Also while cases such as IBM take place in dynamic technology markets, there are other cases which take place in relatively static markets. There is no logical reason to prohibit the use of post-Chicago models in all antitrust cases on the basis that some markets move too quickly to allow them to be applied effectively.
There are also those who believe that post-Chicago economics can be converted into a workable legal policy. 75 Brodley believes that with simplification some of the more complex modern economic principles can be made into a workable form of law.76 Further, there are two groups of commentators who have each put forward their own version of a test that could, and they believe should, be used to apply the latest thinking in
71 United States v. International Business Machines Cor-poration, Docket number 69 Civ.
DNE (S.D. NY); see Richard J. Pierce, ‘Is Post-Chicago Economics Ready for the Court Room? [2001] 69 Geo.Was.L.R. 1103, 1110
72 T-201/04, Microsoft v Commission [2007] ECR II-3601
73 Microsoft (Case COMP/C-3/37.792) [2005] 4 CMLR 965
74 T-201/04, Microsoft v Commission [2007] ECR II-3601
75 Joseph F. Brodley, ‘Post-Chicago Economics and Workable Legal Policy’ [1995] 63 Antitrust L. J. 683, 694
76 ibid 695
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economic theory to tying cases coming before the courts. These tests will be explained in the following section.
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