Antitrust Pork Barrel

Antitrust holdup source, cross-national institutional variation, and corporate political strategy implications for domestic mergers in a global context

“…A number of scholars, nevertheless, argue that political pressures play a strong role in determining antitrust policy decisions (e.g., Faith, Leavens & Tollison, 1982;Coate, Higgins & McChesney, 1990). …”

“…As noted, budgets make up a critical element of institutional capability; yet, budgets also convey important information on institutional autonomy. Governments can be quite sensitive to budgetary fluctuations; hence, the more dependent an antitrust agency is on a specific administration's or legislature's favor for necessary funding, the greater the incentive to take political calculations into account when making policy decisions (Faith, Leavens & Tollison, 1982;Coate, Higgins & McChesney, 1990). For instance, the budget cuts for antitrust enforcement under the Reagan administration (Kwoka, 1999) certainly signaled a desired tenor for antitrust enforcement.…”

“…Recall, however, that antitrust policy is often considered to be public interest driven as opposed to private interest driven; thus, leaving merging firms with relatively little agency upon which to act in the political arena. Some scholars, nevertheless, have considered antitrust outcomes to be partially subject to political pressure (e.g., Pittman, 1977;Faith, Leavens & Tollison, 1982;Coate, Higgins & McChesney, 1990;Neven, Papandropoulos & Seabright, 1998;Clougherty, 2003). For example, Neven, Papandropoulos and Seabright (1998) show that merging firms facing antitrust scrutiny engage in lobbying activities.…”

Competition Policy with Optimally Differentiated Rules Instead of 'Per se Rules vs. Rule of Reason'

“…(3) Individual decisions of competition authorities can be influenced either directly by the firms themselves or indirectly through political pressures. In the US and the EU a number of competition cases can be found in which political pressure could be observed and where the decisions seemed to have been distorted (Faith/Leavens/Tollison 1982;Schmidt 1999). On one hand, firms aim at a more lenient formulation respectively application of competition rules.…”

Private Enforcement of Statutory and Administrative Law in the United States (and Other Common Law Countries)

“…Regulators themselves may have preferences for underenforcement for many reasons, including ideological preferences, career goals, to protect or enhance budget allocations, to avoid political controversy, or simple laziness (DeShazo andFreeman 2003: 1454;McCubbins et al 1987: 247;Roach and Trebilcock 1996: 482). Finally, administrators may face pressure to underenforce from executives or legislatures who may be motivated by ideological preferences, electoral imperatives in general, or the desire to protect specific constituents in particular (Burke 2002;DeShazo andFreeman 2003: 1454-55;Faith et al 1982). Although this literature has focused on private enforcement regimes created because of concern about under-enforcement by administrators, legislators may believe that private enforcement regimes likewise can guard against over-enforcement by the bureaucracy (Farhang 2010a: 94-128).…”