Toward an Empirical and Theoretical Assessment of Private Antitrust Enforcement

The dominant view in the antitrust field is that private enforcement cases, and especially class actions, accomplish little or nothing positive but, on the contrary, are counterproductive. Despite strongly worded convictions, that view has been premised on anecdotal, self-serving and insufficiently substantiated claims. Indeed, the authors' 2008 study of 40 private cases appears to constitute the only systematic effort to gather information about a significant number of private antitrust actions. That study generated a great deal of controversy, including questioning of our conclusions by high officials at the Department of Justice and by Professor Daniel Crane at the University of Michigan Law School. Given this subject's importance and controversial nature we undertook a supplemental study of 20 additional private antitrust cases. This article analyzes the 20 new cases, compares and contrasts them with that of our earlier group, and draws insights from all 60. The studies demonstrate that private litigation has provided substantial cash compensation to victims of anticompetitive behavior: at least $33.8 to $35.8 billion. The studies also show that private antitrust enforcement has had an extremely strong deterrent effect. In fact, private enforcement probably deters more anticompetitive behavior than even the appropriately acclaimed anti-cartel program of the U.S. Department of Justice Antitrust Division. Another purpose of our study was to ascertain important characteristics of private antitrust cases that could help influence the debate over their efficacy. These include whether there were indicia that the cases had underlying merit, the significance of recoveries from foreign violators of U.S. antitrust law, and the sizes of attorney’s fee awards and claims administration expenses. Finally, this article responds to criticisms of our analysis and our conclusions. In particular, we explain why the Department of Justice officials are incorrect in challenging our claims about the deterrence effects of private antitrust enforcement and why Professor Crane is similarly mistaken regarding its compensation effects. We explain why our earlier study did indeed demonstrate the truly significant benefits of private antitrust actions — conclusions our new empirical work confirms and strengthens