CORPORATE CRIME REPORTER

Antitrust Movie – Fair Fight in the Marketplace to Air on PBS in April
21 Corporate Crime Reporter 9, February 21, 2007

Can they make a movie about antitrust?

Yes.

Can they make it interesting?

Yes.

Can they document the illegal antitrust behavior of Microsoft, and Mylan Labs and Archer Daniels Midland?

Yes.

Can they do it in less than 30 minutes?

Yes.

Can they introduce Sherman and Clayton to high school students in California?

Yes.

Can they convince PBS to air it on its stations?

Yes.

Believe it or not – yes.

The movie is called Fair Fight in the Marketplace.

The movie is the brainchild of Bert Foer, president of the American Antitrust Institute.

The movie was made possible in part by a $500,000 grant from a $39 million cy pres fund – the California Vitamin Cases Consumer Settlement Fund – that was created by a judge in an antitrust class action case.

The fund is being administered by California consumer advocate Harry Snyder.

The movie will be available in English with a choice of Spanish and Mandarin subtitles.

Mandarin subtitles?

“I showed the movie at an international cartel conference,” Foer explained. “And a lawyer from China came up to me and said that China was about to pass an antitrust law and he wished the movie could be seen in Chinese. I said – if you can fund the subtitles, we’ll do it.”

The lawyer got Howrey & Simon to fund the Mandarin subtitles.

The movie itself focuses on three case studies – price fixing of generic drugs by Mylan Laboratories, criminal price fixing of feed additives by Archer Daniels Midland, and monopolistic behavior by Microsoft.

Foer believes this is the first ever movie about antitrust.

In it, we learn from New York Law School Professor Rudolph Peritz: “Antitrust law is an American invention and one of its most successful exports – we invented it and now there are antitrust laws in more than 100 countries.”

From Robert Pitofsky, former chairman of the Federal Trade Commission we learn that “in the 1960s, the United States had by far the most vigorous antitrust system in the world.”

“But the 1980s, we had perhaps the least vigorous,” Pitofsky says. “Antitrust was almost asleep in the 1980s. Since then, the effort has been to try and find a middle ground.”

From Purdue University Professor John Connor that “less than one third of price fixing conspiracies are discovered by the authorities – and it is those kind of numbers that continue to draw businessmen into the game of price-fixing.”

The movie also has cameo appearances by former Microsoft defense attorney and Fried Frank partner Rick Rule, Justice Department official Scott Hammond, ADM prosecutor and now King & Spalding partner James Griffin, Microsoft Judge Thomas Penfield Jackson, author Ken Auletta, and Hogan & Hartson partner Jeffrey Blattner.

The movie, narrated by National Public Radio’s Mara Liasson, traces the history of the antitrust laws – and keeps it interesting for young people with cartoon depictions of price fixing and television clips of kids competing.

But the film actually becomes gripping educational television – am I losing my bearings here? – when it profiles the Mylan Labs, ADM and Microsoft cases.

The lysine price fixers are shown on tape laughing about the FBI and the Justice Department and brazenly boasting about their criminality – the competitors are our friends, and the customers are our enemies, says one.

ADM was fined $100 million in that case and Hammond says that the ADM case was the first case where the criminal fine exceeded $10 million.

Since then, there have been 40 more cases where the criminal fine exceeded $10 million, Hammond says.

Foer says that the film tries to play it down the middle, but as the Microsoft segment makes clear, the film’s sentiments are with the trustbusters.

A special edition of the film for high school students – available on the net – has commentary by Thomas Papageorge – an antitrust prosecutor with the Los Angeles District Attorney’s office.

“The Microsoft case raises the issue of what the antitrust laws can do when a dominant company uses its economic muscle arguably to sabotage a competitor,” Papageorge says. “The Department of Justice and a number of states charged Microsoft with taking actions to destroy Netscape, a company making a web browser product, which competed with Microsoft’s Internet explorer. As you watch, ask yourself – why did Microsoft use these controversial tactics rather than just making its internet browser a much better product? Isn’t this second alternative what we are trying to encourage in our free market system? Microsoft argued that its practices were tough but fair competition. In watching this segment, decide for yourself whether Microsoft was acting as a bullying monopolist, or a groundbreaking innovator in high technology.”

The trial in the case went on for more than six months. Microsoft’s Rick Rule argued that his client’s Internet Explorer browser was not a separate product but part of the Windows Operating system.

“But it was proven to me that they were indeed separable products,” Judge Thomas Penfield Jackson says.

Judge Jackson ruled that Microsoft had illegally maintained its monopoly and blocked competing internet browsers from reaching consumers.

He ruled that Microsoft engaged in a pattern of interference and intimidation using its monopoly power in the operating system market to punish any computer maker that tried to install a rival browser.

As a remedy, Judge Jackson recommended that Microsoft be broken into two separate companies – one for the operating system and the other for applications such as the browser.

The decision was upheld on appeal – although Judge Jackson’s remedy was never implemented.

When the Bush administration came into office in 2001, the Justice Department settled the case – leaving Microsoft intact.

All in all, not bad for a 30 minute primer on antitrust.

Teddy Roosevelt would be proud.


Home

Corporate Crime Reporter
1209 National Press Bldg.
Washington, D.C. 20045
202.737.1680