University of Southern California

The Strategic Use of Public and Private Litigation in Antitrust as Business Strategy

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Article by D. Daniel Sokol
From Volume 85, Number 3 (March, 2012)

One understudied area of the formative period of antitrust and of Standard Oil’s conduct during this period is in the use and nature of antitrust private claims against Standard Oil. In contemporary antitrust, the ratio of private to government brought cases is ten to one. In contrast, one hundred years ago government cases constituted nearly all antitrust cases, and many of such cases were state cases. On the hundredth anniversary of the Standard Oil decision, the present Article uses a discussion of the antitrust private actions against Standard Oil prior to the company’s court-ordered break up in 1911 as a starting point for a broader discussion about the interaction between public and private rights of action in antitrust in the modern era. Traditionally, government will bring antitrust cases to offset competitive distortions in the market either because private plaintiffs do not bring the right kinds of antitrust cases or because private actors lack the resources of government to bring good cases. This Article suggests circumstances in which government not only does not correct but also actually creates the market distortion by bringing a nonmeritorious case that aids the firm’s competitors rather than a case that helps consumers. In identifying this behavior, this Article combines two strands of literature–the strategic use of antitrust by private actors on the one hand and a public choice based economic theory of regulation on the other.

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