Sal, the obvious response to this argument is, as Boies points out almost every day on the courthouse steps, that different rules apply to competition by monopolists than to competition by other firms. His description of the present state of the law in this respect is absolutely correct.
However, this "unfair double standard" theme keeps popping up over and over again in Microsoft's conduct and spinning of the trial. A lot of it, I am sure, is just PR spin. Still, I cannot help but think that there may be more to this in a legal sense than meets the eye, at least at this time.
The interesting thing about antitrust law is that it is judge-made. Unlike most statutes, which try to lay down a clear rule to be applied by the courts, the antitrust statute is, in Bork's words, "singularly opaque." R. Bork, The Antitrust Paradox 20 (1978). Furthermore, again according to Bork, ". . . Sherman and many of his colleagues repeatedly assured the Senate, without objection by anyone, that they proposed merely to enact the common law," albeit, according to Bork, "an artificial construct, made up for the occasion out of a careful selection of a few recent decisions from different jurisdictions, plus a liberal admixture of the senators' own policy prescriptions." Id. (emphasis added). In other words, by passing the Sherman Act, Congress was delegating to the courts the task of creating a common law of monopoly.
The common law, however, is not just a set of rules. Those rules have certain characteristics. The judiciary is limited in the kinds of rules it may create. It may not, for example, enact legislation, although it obviously has the duty to enforce the legislation enacted by Congress. For a court to legislate violates the constitutionally created separation of powers between the legislative and judicial branches of government.
The kinds of rules which a common law court creates are described by Hayek:
We may sum up the results of this chapter with the following description of the properties which will of necessity belong to the law as it emerges from the judicial process: it will consist of rules regulating the conduct of persons towards others, applicable to an unknown number of future instances and containing prohibitions delimiting the boundary of the protected domain of each person (or organized group of persons). . . . These rules will achieve their intended effect of securing the formation of an abstract order of actions only through their universal application, while their application in the particular instance cannot be said to have a specific purpose distinct from the purpose of the system of rules as a whole.
1 F.A. Hayek, Law, Legislation and Liberty: Rules and Order 122 (1973) (emphasis added).
Legislation, according to Hayek, is qualitatively different from common law:
Government . . . is a deliberate contrivance which, however, beyond its simplest and most primitive forms, also cannot be conducted exclusively by ad hoc commands of the ruler. As the organization which a ruler builds up to preserve peace and to keep out external enemies, and gradually to provide an increasing number of other services, becomes more and more distinct from the more comprehensive society comprising all the private activities of the citizens, it will require distinct rules of its own which determine its structure, aim and functions. Yet these rules governing the apparatus of government will necessarily possess a character different from that of the universal rules of just conduct which form the basis of the spontaneous order of society at large. They will be rules of organization designed to achieve particular ends, to supplement positive orders that something should be done or that particular results should be achieved, and to set up for these purposes the various agencies through which government operates.
Id., 124-25.
I would argue that Hayek's description of the common law also delimits the appropriate judicial role in making law. Furthermore, I would argue that, in interpreting the Sherman Act and laying down the actual rules which provide concrete substance to a common law of antitrust, as the courts are instructed by that statute to create, Congress intended for the courts to be limited in the kinds of rules they make to creating rules which satisfy the criteria Hayek has laid down in describing the characteristics of the common law as developed in other areas.
One of the characteristics of common law rules is that they are capable of universal or general application, see 2 F.A. Hayek, Law Legislation and Liberty: The Mirage of Social Justice 27-29 (1976), a quality which I would contend the special rules applicable to monopolists under current antitrust law (the "double standard" of which Microsoft complains) do not enjoy.
So, it seems to me it can be argued that, to be consistent with the common law mode of decisionmaking which Congress has (arguably) directed the courts to employ in antitrust cases, a rule must, among other things, be universally applicable, i.e., applicable to all firms in a given industry, whether of not they are monopolists.
When courts (as distinguished from Congress itself) create rules which violate these requirements, I would argue that they are legislating, which violates the constitutional separation of powers. |
