The Honorable Orrin Hatch
Senate Committee on the Judiciary
United States Senate
Washington, DC 20010
Dear Senator Hatch:
Few issues are of greater importance to Citizens for a Sound Economy (CSE) than antitrust enforcement. Since its founding in 1984, CSE has been the voice of consumers on antitrust issues and offered detailed analysis and commentary on cases ranging from the divestiture of AT&T to the pending landmark antitrust suit against Microsoft.
Antitrust enforcement is more of an art than it is a science. The ambiguity of the law allows those who enforce it to subjectively decide whether competitive actions, like price cuts, are “predatory” and whether mergers are attempts to “monopolize” or to “fix prices.” Antitrust law has become so broad and indefinite that a credible antitrust case can be built against virtually any successful company in any sector of the economy.
With such broad discretion, it is of paramount importance that the public officials entrusted to enforce antitrust laws have the utmost respect for the institutions of free society: consumer sovereignty, and competitive markets. With this in mind, on behalf of 280,000 CSE members, I urge you to approve the appointments of Timothy Muris as Chairman of the Federal Trade Commission and Charles James as Assistant Attorney General for antitrust enforcement in the Department of Justice.
Over the past three years, CSE has been outspoken in its opposition to the antitrust case against Microsoft, currently pending in appeals court. In addition, CSE has been highly critical of the way antitrust policy has been applied to the WorldCom-Sprint merger, the Heinz-Beechnut merger, the AOL-Time Warner merger, and the predatory pricing case brought against American Airlines.
In each instance, the FTC and/or Justice Department ignored consumer interests to apply specious antitrust principles better geared for the classroom than the marketplace. By undermining natural market processes, antitrust authorities have placed innovators in a precarious position and created an un-equal playing field. Current antitrust enforcement mocks the 5th Amendment’s equal protection clause, as market share has become the determining factor as to whether or not a competitive action is legal.
Both Charles James and Tim Muris would bring some much-needed restraint to antitrust enforcement. Although both strongly believe in the need for antitrust laws, they understand that the ultimate beneficiary of antitrust enforcement must be the consumer. This balanced approach to competition policy is precisely what the nation needs after the past 8 years of overzealous regulatory intervention.
If Messrs. James and Muris are not approved, the Senate will endorse antitrust activism that works at the behest of rival corporate interests instead of consumers. Such a departure from antitrust law’s original intent could prove disastrous to the economy and cause great harm to consumers.
There is no area of American law enforcement more susceptible to caprice and personal ambition than antitrust law. The nebulous legal standards associated with federal antitrust enforcement and the imprecise application of evidence place an undue burden on the custodians of the rich legacy on antitrust policy. However, with appropriate respect for market processes like innovation and price flexibility, we believe that significant improvements can be made to antitrust enforcement. Charles James and Timothy Muris are capable men worthy of the public’s trust in this key area.
It is the hope of CSE’s 280,000 members and supporters that both Mr. James and Mr. Muris are confirmed in a timely manner.
Erick R. Gustafson
Director, The Center for Consumer Choice
Citizens for a Sound Economy