Remarks on the Progress of the Antitrust Modernization Commission


REMARKS ON THE PROGRESS OF THE
ANTITRUST MODERNIZATION

COMMISSION

REMARKS AT THE MILTON HANDLER
ANTITRUST REVIEW

NOVEMBER 29, 2005

Deborah Garza*

I. Composition of the Antitrust Modernization
C om m ission ................................................................ 262

II. The Commission's Charge ......................................... 265
III. The Commission's Initial Work: Setting an Agenda 266
IV. Criteria for Selecting Issues for Study ...................... 267
V. The Commission's Initial Hearings ........................... 270

A. The Robinson-Patman Act .................................. 271
B. Antitrust Rem edies .............................................. 272
C. DOJ-FTC Clearance Agreement ......................... 274
D. State Enforcement of Federal Antitrust Law .... 275
E . O ther Issues ......................................................... 275

V I. C onclusion .................................................................. 277

It is an honor to be here today. I recognize a number of
faces in the audience and invite you all to the next hearing of
the Antitrust Modernization Commission.

* Deborah Garza was appointed by President George W. Bush in March

2004 to chair the Antitrust Modernization Commission. She is also a
partner with Fried, Frank, Harris, Shriver & Jacobson LLP. Previously,
Ms. Garza served in the U.S. Justice Department Antitrust Division as
Chief of Staff and Counselor to the Assistant Attorney General from 1988
to 1989 and as a Special Assistant to the Assistant Attorney General from
1984 to 1985. She received her J.D. from the University of Chicago Law
School in 1981.



I hope that some of what I say today is informative. I
hope that it motivates you to contribute your efforts and
ideas to the work of the Commission, and better enables you
to communicate with your clients about what the
Commission is doing.

I suspect that you already know many of the basic facts
about the Commission. So, I will try to be brief and to leave
time for questions. The Commission is in the "intake" phase
of its work now. Therefore, I want to make the best use of
this time by hearing what is on your minds.

I. COMPOSITION OF THE ANTITRUST
MODERNIZATION COMMISSION

As you may know, the Antitrust Modernization
Commission-or AMC-is a bipartisan group of antitrust
experts (if I can include myself in that group) jointly
appointed by the Congress and the President. There are
twelve Commissioners, including myself. The Senate, the
House, and the President each appointed four
Commissioners, no more than two of whom could be from the
same political party. In total, there are six Democrats, five
Republicans, and one Independent. My co-Chair, Jonathan
R. Yarowsky, is a Senate Democratic appointment. He is a
partner with Patton Boggs LLP in Washington, D.C. Jon
has extensive prior experience on Capitol Hill and in the
Clinton White House Counsel's Office.

You may know very well some of the other
Commissioners. Several of them are your colleagues in the
New York Bar. Each of them is quite accomplished.

Other Republican appointments are: Bobby R. Burchfield,
W. Stephen Cannon, Makan Delrahim, Donald G. Kempf,
Jr., and John L. Warden.

Bobby R. Burchfield was appointed by the White House to
replace Deborah Platt Majoras when she left the AMC to
chair the Federal Trade Commission ("FTC"). Bobby is a
partner with McDermott, Will & Emery in Washington, D.C.
where he heads that firm's Complex Litigation Practice.
Previously, Bobby served as General Counsel to the
campaign of President George H. W. Bush in 1992. He

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argued before the United States Supreme Court on behalf of
the Republican National Committee in support of its
challenge to the McCain-Feingold Campaign Finance Laws.1

W. Stephen Cannon and Makan Delrahim both served as
Deputy Assistant Attorneys General in the U.S. Justice
Department ("DOJ") Antitrust Division and as Chief
Antitrust Counsels to the Committee on the Judiciary of the
U.S. Senate. Steve was also Senior Vice President, General
Counsel, and Secretary for Circuit City Stores, Inc. He is
now with Constantine and Cannon, PC, in Washington, D.C.
Makan recently left DOJ to become a partner with
Brownstein, Hyatt & Farber in Washington, D.C.

Until recently, Don Kempf was Executive Vice President,
Chief Legal Officer, and Secretary at Morgan Stanley.
Before that, he was a partner with Kirkland & Ellis LLP.
He has been involved in a number of high-profile antitrust
matters, including FTC v. Staples, Inc.2 and United States v.
General Dynamics Corp.'

John L. Warden, a well-known and accomplished
antitrust practitioner and litigator, is a partner at Sullivan
& Cromwell LLP. He was involved in such important cases
as Berkey Photo, Inc. v. Eastman Kodak Co.4 and Virgin
Atlantic Airways Ltd. v. British Airways PLC.5 Dennis W.
Carlton is a White House Independent appointment. He is a
professor of economics at the University of Chicago Graduate
School of Business and Senior Managing Director at
Lexecon, an economic consulting firm. Dennis is an
extremely accomplished Ph.D. economist, and the only
economist we have on the Commission. I am quite grateful
for his presence.

Other Democratic appointments, in addition to Jonathan
Yarowsky, are: Jonathan M. Jacobson, Sanford M. Litvak,
John H. Shenefield, and Debra A. Valentine.

1 See 2 U.S.C. §44 (2000); McConnell v. Federal Election Commission,

540 U.S. 93 (2003).
2 970 F. Supp. 1066 (D.D.C. 1997).

' 415 U.S. 486 (1974).
4 444 U.S. 1093 (1980).
' 69 F. Supp. 2d 571 (1999).



Jon Jacobson is a well-known practitioner in New York,
and he is now at Wilson Sonsini Goodrich & Rosati. He has
been a tireless member of the American Bar Association's
("ABA") Antitrust Section and currently serves as editorial
chair for the Antitrust Section's upcoming sixth edition of
Antitrust Developments, even while he serves as an AMC
Commissioner.

Sandy Litvak was a highly respected leader of the
Antitrust Division from 1979 to 1981. Upon leaving DOJ, he
became Senior Executive Vice President and Chief of
Corporate Operations for the Walt Disney Company, where
he also served briefly as Vice Chairman of the Board of
Directors. Sandy is now a partner with Hogan & Hartson
LLP.

John Shenefield also previously served with great
distinction as Assistant Attorney General in charge of
antitrust enforcement during the Carter Administration,
from 1977 to 1979. As Assistant Attorney General, John was
responsible for an earlier report on antitrust enforcement,
which focused on the trial of complex antitrust cases,
immunities and exemptions, and monopolization standards.6

From 1979 to 1981, John served as Associate Attorney
General in DOJ. Today, he is a partner with Morgan Lewis
& Bockius LLP in Washington, D.C.

Last, but certainly not least, Debra Valentine served at
the FTC during the 1990s in several leadership roles,
including as the FTC's General Counsel from 1995 to 2001.
Debra was also an attorney in the Office of Legal Counsel at
DOJ from 1981 to 1985. She recently left her private
practice as a partner at O'Melveny and Myers LLP in
Washington, D.C. to join United Technologies Corporation as
Vice President and Associate General Counsel.

The last appointments to the Commission (before Bobby
Burchfield) formally were made on March 17, 2004. The
Commission held its first meeting about two weeks later on
April 2, 2004. April 2nd is a significant date because the

6 Report to the President and the Attorney General of the National

Commission for the Review of Antitrust Laws and Procedures (1979).

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Commission expires thirty days after it issues its report, and
its report must be issued within three years of the date of the
Commission's first meeting. Therefore, the Commission will
issue a report no later than April 2, 2007.

II. THE COMMISSION'S CHARGE

The Antitrust Modernization Commission Act charges the
Commission with four duties.' First, the Commission is
directed to examine whether there is any need to modernize
U.S. antitrust laws and to study related issues. Second, we
are directed to solicit the views of all parties concerned with
the operation of the antitrust laws. Third, we are required to
evaluate the advisability of proposals and current
arrangements with respect to the issues that we decide to
study. Fourth, we are to prepare and to submit to Congress
and the President a report containing a detailed statement of
findings and conclusions, along with recommendations for
legislative or administrative actions that we consider
appropriate.'

The legislative history of the Antitrust Modernization Act
is sparse. There were no hearings, and there was only one
sponsor, Congressman James Sensenbrenner, Jr. Our
principal guidance on what Congress intended (aside from
the language of the statute) is contained in a press release
issued by Congressman Sensenbrenner when he introduced
the legislation. Congressman Sensenbrenner said:

I believe our antitrust laws have worked well by
fostering a competitive marketplace where American
consumers have affordable choices. However, we
shouldn't shy away from taking a look at some of
these antitrust laws that have served us well over
the past 100 years to see if any changes might help
ensure a competitive and innovative marketplace for
the next 100 years. Hopefully this proposed

Antitrust Modernization Act of 2002, Pub. L. No. 107-203, §§ 11051-
11060, 116 Stat. 1856 (2002), available at http://www.amc.gov/pdf/
statute/amc-act.pdf.

8 Id. at § 11053.



COLUMBIA BUSINESS LAW REVIEW

Commission could exhaustively tackle this issue and
make some constructive recommendations.9

Congressman Sensenbrenner identified three areas in
particular that he hoped the Commission would address: (1)
the relationship between intellectual property and antitrust
law, (2) antitrust enforcement in a global economy, and (3)
the role of the State Attorneys General in enforcing federal
antitrust law. However, the Commission was neither
required, nor limited to addressing solely these issues.

III. THE COMMISSION'S INITIAL WORK:
SETTING AN AGENDA

The Commission thus had broad discretion in deciding its
agenda, which it was directed to exercise after considering
the views of interested persons. The Commission began its
work by deciding what it would study. At the same time, we
hired a staff, set up an office, launched a website, and did all
of the things necessary to create a new federal agency.

The Commission engaged in several months of public
outreach. We solicited public comment. Groups of
Commissioners and Commission staff met with members of
the antitrust community, including present and former
antitrust enforcers, judges, scholars, and representatives of
the ABA and American Antitrust Institute ("AAI"). We
extended invitations to many interested persons, including
consumer groups and various business and legal groups.

During this period, the Commission formed several small
working groups of Commissioners organized around broad
areas of antitrust policy. Each working group worked with
Commission staff to collect information and to make
recommendations to the full Commission on what issues
should be studied. They each produced a memorandum
discussing specific questions and areas suggested by the
public for study, advising which issues the working group

' Press Release, Sensenbrenner Introduces Antitrust Study
Commission Legislation (June 27, 2001) [hereinafter, Press Release],
available at http://judiciary.house.gov/legacy/news-062701.htm.

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recommended for further study or not and explaining why or
why not.

The full Commission met in January 2005 to discuss the
working group recommendations and to select issues for
further study. All of our substantive deliberations were
conducted in public.

The Commission did not accept all of the
recommendations of the working groups. Some were revised,
and others were deferred for further development, but most
were accepted. The working group memoranda and all
comments received by the Commission are available on the
Commission's website, at www.amc.gov.

Perhaps as a result of the process that we used, the
Commission adopted a long list of issues to study-about
twenty-nine issues covering ten subject areas. We have been
criticized for that, and the criticisms were well taken. I
suspect that if any one of the Commissioners alone had
developed the agenda, it would have been more limited.
Nevertheless, none of the issues that the Commission is
considering are unimportant. In addition, covering such a
broad range of issues can be beneficial because it gives the
Commission an opportunity to set forth a more coherent and
cohesive assessment of antitrust enforcement, which is based
on a few fundamental principles. It will also help the
Commission to appreciate more fully how changing
enforcement policy in one area may affect enforcement in
another area. In addition, if we do not confront these issues
now, then when will they be addressed? For at least some of
the issues that we are studying, another opportunity for
improvement might not come along for a long time, if ever. I
think that each of these considerations motivated the
Commission to adopt such an ambitious agenda.

IV. CRITERIA FOR SELECTING ISSUES FOR
STUDY

Before discussing the issues specifically, I want to answer
some questions that you might have about the criteria that
we applied in deciding which issues to address.



At the Commission's October 2004 meeting, we agreed to
focus on issues that appeared to have significant impact,
where there was broad public consensus on a need for
change, and where the Commission could usefully and
uniquely contribute to reform. Although the AMC Act
directs the Commission to consider legislative
recommendations, we did not limit ourselves to issues that
seemed particularly amenable to legislative change. A
majority of the Commissioners agreed that for some
important issues not suited to legislative reform, the
Commission nevertheless should use its platform to promote
the use of clear and sound enforcement principles.

Some Commissioners suggested that we should not study
issues that likely would be addressed through the
development of the common law, and that our focus should
be on procedural issues, rather than on substantive ones.
They argued that antitrust case law has continuously
evolved over the last 100 plus years. Over time, the courts
and enforcement agencies have moved toward broad
application of a sensible "rule of reason" approach to most
business arrangements." The exception is a narrow range of
"hard core" violations where there appears to be a relatively
broad consensus for applying a standard of per se illegality.1

In addition, application of the "rule of reason" has been
refined over time, so that the risk of wrongly decided cases
inhibiting efficient, procompetitive conduct has been greatly
reduced.

These Commissioners expressed a concern that if we were
to codify standards currently employed under the rule of

"0 Under the rule of reason, a court will consider all relevant facts to

determine whether the challenged conduct is actually anticompetitive.
" Hard core violations subject to per se condemnation are agreements

between or among competitors to fix price or output, to rig bids, or to
allocate business that are unrelated to any economic integration of the
competitors' operations that plausibly could generate efficiencies. See, e.g.,
Palmer v. BRG of Ga., Inc., 498 U.S. 46 (1990); FTC v. Superior Court
Trial Lawyers Ass'n, 493 U.S. 411 (1990); United States v. Trenton
Potteries Co., 273 U.S. 392 (1927); FTC & DOJ, Antitrust Guidelines for
Collaborations Among Competitors, available at http://www.ftc.
gov/os/2000/04/ftcdojguidelines.pdf.

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reason-for example, in the areas of intellectual property
licensing, collaboration on standards, and Section 2 of the
Sherman Act-we might inappropriately interfere with the
free evolution of antitrust policy.

I believe that all of the Commissioners appreciated the
merits of these arguments. However, a majority believed
that the Commission could play an important role by
endorsing certain principles of law or by urging the
formulation or clarification of enforcement guidelines in
certain areas.

For example, a majority of the Commissioners voted to
study exclusionary standards under Section 2 of the
Sherman Act, even though they appeared to agree that the
Commission is unlikely to recommend codifying any
particular standards. 2 A similar approach was taken with
respect to reviewing other substantive areas, such as merger
analysis.

During hearings, the Commission asked witnesses
whether the Commission should study monopolization and
other substantive standards. In regard to Section 2, we
specifically requested public comment on whether any
change should be effected through the development of case
law, legislative reform, or other means. With relative
uniformity and enthusiasm, witnesses recommended that we
look at Section 2 jurisprudence and standards. Although
they urged the Commission not to recommend legislative
change, they endorsed the importance of promoting dialogue
about Section 2 enforcement. 3

Obviously, there has already been a good deal of
discussion in other fora concerning Section 2 standards. The
ABA and other groups have done a very good job in this area,
and DOJ and the FTC will hold hearings soon on this issue.
Nonetheless, the majority of Commissioners believe that,
given the Commission's status as a bipartisan group
appointed by Congress and the President to report on the

12 15 U.S.C. § 2 (2000).
" See Hearing Before the Antitrust Modernization Commission (2005),

available at http://www.amc.gov/commissionhearings/pdf/050905_Exclus-
Conduct.pdf.



state of antitrust enforcement, the Commission is uniquely
positioned to facilitate reform.

Did the Commission decline to consider issues that might
be considered controversial or politically infeasible? No. For
example, the Commission agreed to consider controversial
issues, such as whether to recommend repeal of the
Robinson-Patman Act,14 the appropriate role of the state
attorneys general in federal antitrust enforcement, the
standing of indirect purchasers to sue under federal
antitrust law, the recovery of treble damages in private
antitrust suits, the DOJ-FTC clearance agreement, and
Section 2 standards. The Commissioners did not shy away
from taking on these issues, notwithstanding the
controversy.

You might ask about the Commission's decision not to
study reform of American international trade law. Isn't that
an example of "chickening out?" I don't think so. Nothing
precludes the Commission from recommending that
Congress and the President extend the principles of free and
open competition to international trade policy, if the majority
of Commissioners agree to do so. However, trade policy is
distinct from domestic antitrust policy. International trade
issues are part of foreign policy. The Commissioners are not
experts in trade law, and we have our hands full with core
antitrust issues.

Did the Commission try to identify issues where we
already thought that we had consensus on a particular
conclusion? No, we explicitly agreed that this would not be a
criterion. Recommendations supported by the full
Commission likely will have more weight with policymakers.
However, we do not want to prejudge the existence of a
consensus on any particular issue or recommendation.

V. THE COMMISSION'S INITIAL HEARINGS

To give you a sense of how the Commission is proceeding,
I would like to discuss briefly the issues that the Commission

14 15 U.S.C. § 13 (2000).

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addressed in its initial hearings, which concerned the
Robinson-Patman Act, private remedies, and civil remedies.

A. The Robinson-Patman Act

For many years, observers have criticized the Robinson-
Patman Act for discouraging procompetitive price
competition and reducing efficiency in distribution that
generally benefits consumers. In addition, it has been
argued that the Robinson-Patman Act is unnecessary, given
the availability of Section 2 of the Sherman Act to attack
anticompetitive predation.15 Some critics have recommended
outright repeal of the Act, while others have argued that, at
the very least, the Robinson-Patman Act should be applied in
a manner that is more consistent with modern antitrust
policy-for example, by requiring plaintiffs to prove
anticompetitive market effect. 6  As some opponents to
change testified before the Commission, however, there is
also a view that the Robinson-Patman Act should be used to
protect small businesses in order to promote diversity in
distribution.17

We held hearings in July asking for public comment and
testimony on a number of issues related to the Robinson-
Patman Act. For example, we sought testimony and
comment on the effects of current Robinson-Patman Act
enforcement. What are the costs of litigation? Is there still a

"See, e.g., Herbert Hovenkamp, Symposium: Antitrust at the
Millennium (Part I): The Robinson-Patman Act and Competition:
Unfinished Business, 68 ANTITRUST L.J. 125, 130 n.15 (2000) ("Very few
statutes have survived such long-lived and unrelenting criticism as has
been directed against the Robinson-Patman Act."). See also DOJ, REPORT
ON THE ROBINSON-PATMAN ACT 35-74, 75-100 (1977) (criticizing the Act for
discouraging procompetitive selective price cuts and reducing efficiency in
distribution); ABA Antitrust Section Monograph No. 4, The Robinson-
Patman Act: Policy and Law, Vol. 1 (1980) at 27-33 (criticizing the Act);
REPORT OF THE WHITE HOUSE TASK FORCE ON ANTITRUST POLICY, 2
ANTITRUST L. & ECON. REV. 40-41 (1968-69).

16 See, e.g., Hearing Before the Antitrust Modernization Commission

(2005) (statement of Herbert Hovenkamp), available at http://www.a
mc.gov/commission-hearings/pdf/Hovenkamp.pdf.

'7 See, e.g., id.



COLUMBIA BUSINESS LAW REVIEW

significant amount of litigation under the Robinson-Patman
Act? Are businesses avoiding efficient distribution practices
because of fear of liability and litigation? Are consumers
being deprived of lower prices? What purposes should the
Robinson-Patman Act serve? Should the Act protect small
business or further consumer welfare? To what extent do
those two interests converge? To the extent that they do
converge, are we better off relying on Section 2 of the
Sherman Act?

We asked whether the Robinson-Patman Act should be
repealed or modified by requiring a showing of antitrust
injury or competitive harm. We also asked whether
repealing or modifying the Robinson-Patman Act would
result in moving enforcement from federal court to state
court, thereby potentially creating a larger morass. Through
its inquiry, the Commission hopes to bring additional
coherence to antitrust law and to clarify the proper goals of
antitrust in the Twenty-first century.

B. Antitrust Remedies

The Commission has also held hearings on antitrust
remedies or, more generally, whether we are achieving
optimal deterrence. This is an area that theoretically could
be subject to legislative reform. Among other things, the
Commission is considering the issue of treble damages or
damage multipliers. Are treble damage awards appropriate
in all civil cases? Are some procedural changes appropriate,
such as giving courts the discretion to impose a damage
multiplier? Should the availability of multiple damages be
limited to certain types of offenses-for example, to per se
unlawful, hardcore (or "naked") price-fixing? Should courts
apply a heightened burden of proof for the imposition of
multiple damages?

The Commission is also considering questions relating to
the award of prejudgment interest, fee shifting, joint and
several liability, contribution and claim reduction, and
whether private parties should be able to obtain injunctive
relief affecting an entire industry. With respect to indirect
purchaser litigation, the Commission has been examining

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whether Congress should establish the rule of Illinois Brick
Co. v. Illinois8 as a uniform national standard, which would
preempt state repealer statutes, or whether it should
overrule Illinois Brick. If Congress was to overrule Illinois
Brick, should it also overrule Hanover Shoe, Inc. v. United
Machinery Corp. ? 9 Assuming that both indirect and direct
purchasers would have standing to sue, should procedural
mechanisms be adopted to facilitate the consolidation of
direct and indirect purchaser claims? What is the impact of
the recently passed Class Action Fairness Act?20

All witnesses testifying before the Commission agreed
that the area of indirect purchaser litigation is imperfect, if
not broken. The Commission heard from a balanced panel of
witnesses. Despite its flaws, some witnesses urged the
Commission to recommend maintaining the current state of
play. Other witnesses, however-including representatives
of both the plaintiff and defense bars-testified that reform
is needed. I believe that the Commission could be
instrumental in helping Congress to address this area.

The Commission asked panelists to comment on model
legislation proposed by the ABA. Parts of the ABA proposal
gained consensus among the panelists that testified before
the Commission.21

The Commission is also considering enforcement
institution issues. This is an area in which many people
agree that there is a need for change. Antitrust enforcement
today involves two federal antitrust agencies, multiple
regulatory agencies, fifty states, countless private plaintiffs,
and the common law, which has developed through multiple
levels of courts. If you were sitting down to construct an
antitrust enforcement system today, it is likely that you
would not create a system that looked like this.

18 431 U.S. 720 (1977).

'9 392 U.S. 481 (1968).
20 Class Action Fairness Act of 2005, Pub. L. No. 109-2, §9, 119 Stat. 4

(2005).
21 See Hearing Before the Antitrust Modernization Commission (2005),

available at www.amc.gov/commission-hearings/pdf/revisedhearing
transcript050627.pdf.



Conversely, other commentators have advised that the
existence of multiple enforcers is not undesirable because
substantive standards are converging and/or that
competition among regulators is good.22 Harry First, for
example, testified before the Commission that competition
between regulators is desirable."

Congressman Sensenbrenner identified the issue of
multiple enforcers as one that he hoped the Commission
would consider.24  Even if the Commission does not
recommend legislative preemption of enforcement authority,
it could still make some solid recommendations to minimize
the conflict that can arise from a system of multiple
enforcers.

C. DOJ-FTC Clearance Agreement

On the federal level, the Commission has considered the
clearance process between DOJ and the FTC, particularly in
the area of merger enforcement. Everyone here probably is
aware of what happened when DOJ and the FTC attempted
to resolve clearance problems themselves. One member of
Congress in particular became concerned about the agencies'
agreement to allocate the review of media mergers to DOJ.25

Clearly, the agencies have been "gun shy" after that. During
her confirmation hearings, I believe that FTC Chair Debbie
Majoras was asked to commit that she would not seek a
clearance agreement with DOJ. Accordingly, clearance
seems to be an area where the Commission might actually be
useful. Indeed, if the only thing that comes out of the
Commission's work is a sensible clearance procedure,

See, e.g., Hearing Before the Antitrust Modernization Commission
(2005) (statement of Prof. Harry First), available at www.amc.gov/
commissionhearings/pdf/051026_transcriptstateenforce_.pdf.

23 Id.
24 See Press Release, supra note 9, n. 10.
25 See Caroline E. Mayer, Merger-Review Plan Scuttled; Hollings

Threats Kill Proposal, WASH. POST, May 21, 2002, at El.

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taxpayers will have gotten a good return on their $4 million
investment in the Commission.2"

D. State Enforcement of Federal Antitrust Law

The Commission is also considering the role of the states
and private parties in federal antitrust enforcement. This
tends to be a very emotional issue. We heard testimony from
the State Attorney General from Maine on behalf of the
group of state attorneys general.27 The other Commissioners
and I know that the state attorneys general feel very
passionately about their enforcement mission. However, a
majority of Commissioners have agreed that it is worth
considering whether we can achieve better coordination of
state and federal enforcement efforts, particularly where the
effect of conduct and relief is national or regional, rather
than statewide.

E. Other Issues

The Commission is also studying a number of other
issues, including the standards for assessing exclusionary
conduct, unilateral refusals to deal, and bundling. With
respect to the so-called new economy issues, we are
considering the appropriate balance between policies that
protect intellectual property rights versus those that
promote competition. In this area, the Commission is largely
looking at the FTC's existing recommendations," some of

26 However, I do not think that this will be all that the Commission

will be able to accomplish.
27 See Hearing Before the Antitrust Modernization Commission (Oct.

15, 2005) (statement of Hon. G. Steven Rowe), available at http:l
www.amc.gov/commission-hearings/pdf/Statement-Rowe.pdf; Allocation of
Antitrust Enforcement Between the States and the Federal Government:
Hearing Before the Antitrust Modernization Commission (Dec. 8, 2005)
(statement of State Attorney General G. Steven Rowe), available at
http://www.amc.gov/commission-hearings/pdf/Supplemental-Statement_R
owe.pdf.

28 FTC, To PROMOTE INNOVATION: THE PROPER BALANCE OF

COMPETITION AND PATENT LAw AND POLICY (2003), available at

http://www.ftc.gov/os/2003/10/innovationrpt.pdf.



which, I believe, may be part of various pieces of proposed
legislation pending before Congress. The Commission heard
testimony specifically on those recommendations with the
idea that we might advise Congress on their merits. The
Commission has also held hearings on antitrust analysis as
applied to industries characterized by significant
technological innovation. The Commission understands that
the FTC and DOJ may soon issue a report on these issues as
well. We look forward to the publication of that report, as it
may influence what we say in ours.

In relation to merger enforcement, the Commission has
considered both the Hart-Scott-Rodino Act "second request"
review process and substantive merger analysis, particularly
transparency issues and the treatment of efficiencies.29

In the future, the Commission will hold hearings on
antitrust immunities and exemptions and the application of
antitrust rules to regulated industries. These are also
controversial areas, or at least areas that have drawn
substantial public attention. Immunities and exemptions
hearings will be held on December 1. Regulated industries
hearings will be held on December 5.

In January, the Commission will hold hearings on
international issues, including Empagran S.A. v. F.
Hoffman-LaRoche, Ltd.30 and the imposition of conflicting
remedies by various jurisdictions for the same conduct.
While Congress has recently focused on conflicts between the
United States and the European Union, in the future, the
problem could become much broader. Many jurisdictions
have adopted antitrust laws. Although there may be no
basis for believing that Europe has applied its competition
laws in a discriminatory fashion, there is at least a
theoretical concern that some developing countries might be
tempted to do so. In the future, conflict may occur not so
much with Europe, as between the United States and other
jurisdictions. Indeed, such conflict is possible even where

29 Hart-Scott-Rodino Antitrust Improvement Act of 1976, 15 U.S.C.

§18(a) (2000).
30 542 U.S. 155 (2000).

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jurisdictions do not apply their laws in a discriminatory way.
The Commission will consider whether it makes sense to
develop a framework to resolve this potential conflict now,
rather than waiting until the conflict boils over into possible
trade war.

The Commission currently plans to conclude issues
hearings in January 2006. On January 19, the Commission
will hold an economist roundtable involving leading
industrial organization economists to discuss the state of
economic learning and the economic underpinnings for
current policy. The Commission is also hoping to hold a
separate hearing in February or March to provide the
Assistant Attorney General for Antitrust and the Chair of
the FTC an opportunity to share their thoughts on reform.
Through May 2006, Commission staff-consulting with
Commissioner study groups-will compile summaries of the
information collected from comments and testimony and
develop the framework for Commission deliberations on
findings and recommendations.

A question has been raised by the AAI whether meetings
and calls of the study groups with Commission staff should
be open to the public. However, the Commission has not
delegated its responsibilities to the study groups. The study
groups are intended to help guide and to be a resource to the
Staff in framing the Commission's deliberations and
communicating the results. The Commission's substantive
deliberations will be conducted in the open, as required by
the Federal Advisory Committee Act.31

VI. CONCLUSION

Some people have expressed skepticism about what the
Commission can accomplish. First, it has been said that
there may be no political will to act on the Commission's
recommendations. Congressman Sensenbrenner was the
only active proponent of the Commission, and he will no
longer be head of the House Judiciary Committee as of April
of 2007. Second, it has been said that because the

31 5 U.S.C. § 10 (2000).



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Commission is a consensus-based entity, it is likely to make
only marginally important and incremental
recommendations.

Although there was hardly a groundswell of support for
any particular antitrust reform at the time the Commission
was created, the Commission could be the impetus for
change. Further, although I do not necessarily expect the
Commission to recommend radical change, as Congress does
not tend to move radically in changing policy. Such restraint
is generally a good thing, insofar as it helps to avoid
mistakes and to ease the impact of change on affected
interests. Even if the Commission recommends less than
radical changes, however, I believe that its efforts can still
offer significant value.

The International Competition Policy Advisory
Committee ("ICPAC") is perhaps a good model for the AMC.
ICPAC appears to have had a beneficial impact. Again, if
the AMC could prompt movement on a DOJ-FTC clearance
agreement, toward eliminating the litigation nightmare
associated with indirect purchaser litigation, or on any other
issue that we are considering, it may well have been worth
the investment. As I have mentioned, the Commission hopes
to promote dialogue on key issues and to guide other
jurisdictions in developing their competition law. Even if
there is no immediate legislative or other action as a result
of the Commission's report, it may serve yet as an important
reference in the future.

[Vol. 2006