Laura Phillips-Sawyer

2020 Charlotte, North Carolina

Abstract: In 1945, Judge Learned Hand penned one of the most influential opinions in modern antitrust law. In declaring that the Aluminum Company of America (Alcoa) had illegally monopolized the industry for virgin ingot, Hand revived an American anti-monopoly tradition that had appeared dormant over the preceding decades. The ruling is famous for several reasons: it narrowly defined market share in favor of the prosecution; it expanded the application of dominant firm conduct; it interpreted Congressional intent to protect an egalitarian business environment; and it declared that U.S. antitrust would apply to conduct of foreign firms if their actions effected the U.S. market. Each of those contributions has incited legal commentary; however, Hand’s decision to redraw the territorial application of U.S. antitrust has remained largely unexamined. This essay offers an historical explanation for the origins of antitrust extraterritoriality. It reconstructs the network of ideas and interests that created a sustained argument for the expansion of U.S. rules of competition abroad. Drawing from both archival sources, including Hand’s personal papers, and various case files, this essay reconstructs the liberal-progressive movement in law and economics that ultimately supported extraterritoriality and created the “effects doctrine.” Initially, legal reformers promoted American exports by exempting export-oriented trade associations from antitrust scrutiny. But, as concentrated industries abroad became linked with fascist governments and as the New Deal experiment with cartelized industries faltered, American antitrust reformers became increasingly interested in reorienting the Sherman Act against monopolistic multi-national corporations. While business corporations and groups undoubtedly influenced the political process and helped shape legal outcomes, this preliminary research paper focuses on the lawyers who drafted legislation, brought cases, and made U.S. antitrust international.

2022 Mexico City

Abstract: In 1945 Judge Learned Hand wrote one of the most influential opinions in modern antitrust law. In declaring that the Aluminum Company of America (Alcoa) had illegally monopolized the industry for virgin aluminum and had participated in an illegal international cartel, Hand both revived and extended American antitrust law. The Department of Justice’s suit against Alcoa and Judge Hand’s opinion sustaining the indictment represented a clear reversal of the preceding decade’s suspension of antitrust enforcement. Both the indictment and the opinion went much further, however. The ruling is famous for several reasons: It narrowly defined market share in favor of the government; it expanded the category of impermissible dominant firm conduct; it interpreted congressional intent as protecting an egalitarian business environment; and it established the extraterritorial reach of US antitrust laws. Although each of those contributions has incited legal commentary and critique, Hand’s decision to redraw the territorial application of US antitrust has remained largely unexamined. This essay offers a historical explanation for the origins of antitrust extraterritoriality and advances two arguments: First, right before and during the interwar years, the antitrust doctrine of strict territoriality had been eroded through a series of distinguishing cases and contradictory congressional policies. Second, the well-documented connection between European fascism and cartelization provided strong external pressures to extend American antitrust law and policy abroad and to redouble anticartel and antimonopoly provisions at home. Thus, both internal and external pressures culminated in the Alcoa case, which signaled a new era in American antitrust—renewing both anticartel and antimonopolization policy while at the same time linking market competition to democratic political norms. By 1945 extraterritorial antitrust emerged as an acceptable means of governance to curtail international cartel behavior, discipline monopolies at home, and impose an American-led liberal—and hegemonic, imperialistic—internationalism on the rest of the world.

2024 Providence, Rhode Island

Abstract: This paper analyzes the relationship between antitrust law and democracy. Antitrust law, or competition policy, governs how firms compete in the marketplace. Its objective is to promote market competition by curtailing anticompetitive restraints on trade, monopolization, and anticompetitive mergers. That objective has democratic roots and it serves democratic purposes by guarding against real and potential abuses of market power by private actors. The anticompetitive effects have included higher prices and reduced output as well as undue political power over ordinary citizens. American antitrust law, however, does not provide a clear blueprint for applying the law—the original statute is notoriously vague. Yet, antitrust law has changed remarkably since the 1940s, despite there having been very few statutory interventions. As a result, we are left to ask: why has antitrust law changed so considerably over time? Answering that question should inform the ways in which we think about revising or reforming antitrust law for the present moment. My intervention into the antitrust-democracy nexus is to historicize the meanings of market power across the second half of the twentieth century—from structuralism in industrial organization economics, through the Chicago law and economics revolution, to the New Brandeis Movement today. Antitrust law relies on presumptions about market power, or the ability of a firm or firms to raise prices without suffering substantial loss of market share. In this essay, I argue that a historical examination of the meanings of market power demonstrates how and why social scientists have served as the binding glue between antitrust and democracy. In responding to contemporary problems in the real economy, social scientists in law and economics (among other disciplines) have reoriented their research agendas and provided the necessary fodder for changing antitrust law.

2025 Atlanta, Georgia

2025 Atlanta, Georgia

Abstract: Today, we live in a world in which a large number of powerful firms rely on contracting rather than vertical integration to coordinate their global operations. No longer do they find it necessary, or even desirable, to integrate vertically, as Chandlerian business theory would predict. This innovation was not foreordained by either of technological imperatives or trade liberalization policies, though both played important roles in the story. Central to this story—the reordering of center firms—were changes in U. S. law and public policy. In particular, court rulings in the late 1970s empowered a small yet influential number of firms to enter into new kinds of interfirm agreements, which enabled them to expand their control over supply chains without internalizing these tasks within the firm. U. S. courts legalized territorial, non-price vertical restraints in 1977 in Sylvania v. Continental TV; and, by the late 1990s, price restraints were being legalized as well in State Oil v. Khan. Taken together, these legal innovations lowered the costs, and the risks, of franchising and contracting-out, and both reduced the desirability of vertical integration as a corporate strategy. While these changes lowered transaction costs for the contracting firm, sometimes these arrangements imposed new challenges for suppliers and distributors. If the contracting-out firm has market power, it may use these types of supply-chain contracts to force lower input prices or terms of service. In the downstream market, a platform-retailer, for example, can use its market power to control distribution service providers’ laborers. Such vertical contracts can also be used as a device to coordinate producer pricing through the supply chain, raising consumer prices. By contracting out many tasks that that had formerly internalized, firms have disempowered organized labor and disadvantaged both suppliers and distributors. In so doing, they have raised questions among legal scholars not only about the liberalization of vertical contracting, but also about the market power of dominant firms.

2026 London

Abstract: In in this paper I explore, and test, the historical interdependence of two things. On the one hand, this paper surveys the extent to which American production and distribution systems have moved away from being characterized by vertical integration toward, in the 21st century, more often being governed by a “network of contracts.” There are numerous examples of this phenomenon from high-profile firms, such as Dell, Apple, United Fruit, FedEx, and Amazon—each of which contracts out for specialty parts, assembly, and distribution services. This paper begins by highlighting those business strategies and seeks to explain the extent to which that strategy has penetrated other markets. On the other hand, the paper explains the types of business contracts used to facilitate this shift in business strategy and structure, such as exclusive dealing or exclusive distribution channel contracts. Drawing mainly from litigation records, this paper seeks to better understand how new types of contracts played an important role in what many economists and historians refer to as vertical disintegration. That phenomenon has typically been explained as an efficiency-oriented response to technological advancements; however, legal history suggests that these types of distribution-chain contracts emerged in the brick-and-mortar context to help save faltering, if not failing, firms. Thus, historical inquiry suggests that the deployment of these distribution agreements by some of today’s wealthiest and most powerful firms has an ironic origin story and, more importantly, may prompt some reevaluation of the contractual freedom granted to large scale firms. This conference paper comprises the final section of a longer history article (1945 to the present), which I am working to complete.