Joshua Wright headshot

Professor of Law
Antonin Scalia Law School

Joshua D. Wright is University Professor and the Executive Director of the Global Antitrust Institute at Scalia Law School at George Mason University. In 2013, the Senate unanimously confirmed Professor Wright as a member of the Federal Trade Commission (FTC), following his nomination by President Obama.

Antitrust

Popular Media

Commissioner Rosch on the (Smaller?) Role of Economists in Antitrust Litigation

From FTC Commissioner Rosch:

Personally, I think simulation analyses and indeed any kind of economic analyses that require the use of mathematical formulae are of little persuasive value in the courtroom setting. When I see an economic formula my eyes start to glaze over, and if the formula uses Greek letters I tend to think “it’s all Greek to me.” I think that’s the way that courts view this evidence too.  Simulation analyses and the like were presented in the Oracle, Swedish Match and Staples trials, and in all three instances the courts (including some pretty sophisticated judges) virtually ignored them… .

Most economists, however well prepared, will not have the industry experience to serve as the primary “storytellers.” However, they can play an important complementary role and reinforce the testimony of those witnesses by presenting data respecting prices, entry, diversion and/or price erosion.

This passage of a very interesting speech gave me some pause.  A few points:

First, the passage bothers me primarily because even if one believes that economic evidence is not effective at trial, a primary contribution of economic units at competition agencies is to aid in the decision to prosecute in the first instance by, for example, analyzing whether condemning the conduct at issue is likely to benefit consumers.  If Rosch means that the FTC should rely just as heavily on economic evidence at the decision to prosecute stage but is simply saying something about what to do at trial in a world where judges don’t appear to be responding to sophisticated economics that is one thing.  The part about eyes glazing over suggests to me that he is making a more general point about the usefulness of economics in antitrust.

Second, and relatedly, much of the trend in antitrust analysis has been about establishing institutions within competition agencies to facilitate economic analysis into both decisions to bring an enforcement action as well and at trial.  The message here appears to be especially anti-economics relative to other policy speeches that have come out of the Commission in recent years (see, e.g. this or this for recent examples) advocating increased reliance on economic analysis with respect to both the decision to prosecute and litigation.

Third, and getting back to trial, I think an interesting discussion can be had about the appropriate role of economists, the presentation of economic evidence, and the suggestion that such evidence has been rejected by courts in the merger cases Rosch cites.  I know a few economists who I’ve heard argue that a judge’s reliance on economic evidence is at least partially a function of how that evidence is presented — and that the agencies have some room for improvement on this task.   This issue was discussed in a few places in the recent Unilateral Effects Workshop.

Fourth,  for an analysis of how to best organize economists within a competition agency, see this recent posting from Luke Froeb, Paul Pautler, and Lars-Hendrik Roller advocating strong horizontal links between legal and economic units, e.g. reliance on cross-trained experts in law and economics that can evaluate the separate recommendation of the complementary unit.