Private Antitrust Enforcement: Compensation, Deterrence, or Extortion
![handle is hein.journals/rcatorbg13 and id is 55 raw text is: Private Antitrust
Enforcement
Compensation, Deterrence,
or Extortion?
William F. Shughart II
Both the Sherman and the Clayton Acts al-
low any person who shall be injured in
his business or property by reason of any-
thing forbidden in the antitrust laws ... [to] re-
cover three-fold the damages by him sustained,
and the cost of suit, including a reasonable at-
torney's fee. In addition to private individuals,
the term person has been interpreted to in-
clude corporations, partnerships, and other
business entities as well as municipalities,
states, and foreign governments.
The right of private parties to sue under the
antitrust laws has been circumscribed some-
what by judicial decisions requiring that the an-
titrust injury be direct. For example, third
parties that pay higher prices because of anti-
competitive acts or practices, customers of
fringe firms that charge the cartel price without
being direct parties to the price-fixing conspir-
acy, and competitors injured by the lower prices
made possible by a merger, even a merger held
to be unlawful, have all been denied the right to
sue for treble damages.
Despite such limitations, private suits are
William Shughart is a professor of economics at
the University of Mississippi and author of Anti-
trust Policy and Interest-Group Politics.
clearly where the action is in antitrust, at least
since the early 1960s. Unfortunately, the avail-
able data on private antitrust litigation are very
poor. Except for matters in which there is a re-
ported decision, no record exists of the private
cases filed before 1938. By most accounts,
though, private antitrust suits were uncommon
before 1960, and few plaintiffs were successful.
One estimate suggests that a decision was
reached in only 158 private damage suits be-
tween 1890 and 1940; another places this num-
ber at 175. It is estimated that about 423 private
cases were initiated over this entire period, with
plaintiffs prevailing in only 13 of the reported
decisions. There were 619 private cases reported
between 1940 and 1959, and the plaintiff was
successful in just 20 of the 144 private antitrust
decisions recorded between 1952 and 1958.
Nothing in the historical data presaged the ex-
plosion in private antitrust litigation that began
in 1960. Since then, the number of private cases
filed annually has consistently outpaced govern-
ment law enforcement efforts by a wide margin.
Indeed, more than 1,000 private antitrust suits
have been initiated every year since 1971 (see
Table 1).
The reasons for this dramatic increase in pri-
vate antitrust litigation are not well understood.
CATO REVIEW OF BUSINESS & GOVERNMENT 53](ViewImageLocal?handle=hein.journals/rcatorbg13&div=9&collection=&method=preview&ext=.png&size=3)
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Private Antitrust Enforcement: Compensation, Deterrence, or Extortion
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