Alan McAdams is an expert on -- one could possibly say a victim of -- the "big" antitrust case.
McAdams, an economist at Cornell University, took the stand at the trial of the government's antitrust case against International Business Machines Corp. June 28 last year. He is still on the stand today.
McAdams' testimony was interruped twice for the testimony of other witnesses, and there were several long court breaks -- in late summer and over Christmas. Still, the case's monopoly of his time has to be rated one of the longer in legal history. His direct textimony as a witness for the government took 31 court days. Cross-examination by IBM's lawyers, which ended last week, took 36 days.
There is hope that he'll be home for Easter, though. He has only to endure redirect examination by the government and IBM's recross before his "trial" is over.
The government has accused IBM of attempting to monopolize the computer industry. Barring something unexpected, the trial itself, which began in May 1975, isn't expected to be over for several years more, however; IBM will begin presenting its case sometime this spring, presumably, after two more government witnesses take the stand. After the judge comes to a decision based on the massive record -- the transcript now runs to almost 70,000 pages -- appeals could delay final resolution of the case, filed in 1969, until the mid-1980s.
Lengthy, costly, delay-ridden -- the words have become linked in the public mind with the big antitrust case, and the IBM case always is cited as an example.
"Everybody's to blame," David Boies, one of IBM's lead attorneys from the New York firm of Cravath, Swaine & Moore, says. "The government's to blame, I'm to blame, the judiciary is to blame." (As soon as McAdams is off the stand, Boies will be moving to Washington to become counsel for the Senate Antitrust and Monopoly Subcommittee.)
This year, as the IBM case and three other major government antitrust suits wend their way through the administrative process of the Federal Trade commission or the courts, a 15-member presidential commission is to take up the subject of the "big" cases in an effort to find better ways to handle them.
One of the commission's mandates is to consider and make recommendations on ways to expedite complex cases. For instance, it will consider whether a special panel of antitrust judges ought to be available for trying those cases and whether the rules of discovery or evidence ought to be amended. (The other mandate is to review current exemptions and immunities from the antitrust laws to make recommendations about which ones should be retained.)
The commission's membership will be composed of John Shenefield, assistant attorney general for antitrust; Federal Trade Commission Chairman Michael Pertschuk; a chairman of an independent regulatory agency, expected to be Civil Aeronatics Board Chairman Aflred E. Kahn; three members each of the Senate and the House, to be selected by them; a federal district judge; and five at-large members. A defense attorney, a plaintiff's attorney, a member of a public interest group and an academician are expected to be included in the at-large membership.
But like the delays that seem to plague the antitrust cases, setting up the commission is suffering from delays. President Carter signed an executive order creating the commission on Dec. 1, but its sixmonth life does not begin formally until the last of its members is appointed.
Although the House has selected its members --Peter W. Rodino Jr. (D-N.J), chairman of the Judiciary Committee and Monopolies and Commercial Law Subcommittee; Rober McClory (R-III.) and Barbara Jordan (D-Tex.) -- and Sens. Edward M. Kennedy (D-Mass.), chairman of the Antitrust and Monopoly Subcommittee, and Howard M. Metzenbaum (D-Ohio) undoubtedly will be the Democratic senators named to the commission, further action is being held up because of the Republicans' inability to decide between Sens. Strom Thurmond (R-S.C.), a member of the subcommittee, and Jacob K. Javits (R-N.Y.), both of whom want to be chosen.
Meanwhile, both the FTC and Justice have moved to streamline -- by narrowing the focus -- two pending antitrust cases in the pre-trial stage: Justice's 1974 suit against American Telephone & Telegraph Co., and the FTC'S 1973 complaint against Exxon Corp. and seven other major oil comapnies.
The other pending major antitrust case, brought in 1972 against major cereal manufacturers, is being tried before an FTC administrative law judge; whenever and whatever his decision is, it is certain to be appealed through the courts.
Although each antitrust agency is handling two major cases, their leadershave vowed to take on other large cases that are bound to rival the existing ones in complexity and controversy. Both Shenefield and Pertschuk have expressed an interest in additional challenges to "shared monopolies," industries dominated by a few firms whose "parallel" pricing suggests to many independent conduct and the absence of any real competition.
Shenefield and Attorney General Griffin Bell have questioned, for instance, whether public announcements of price changes in some industries -- like steel --other members of the industry, a more sophisticated form of price-fixing than the clandestine meeting in smoke-filled rooms believed in less sophisticated days to be the stage for antitrust violations.
Shenefield has said he hopes to be able to file a case challenging a shared monopoly sometime this spring; last week he said "late" spring. Among the industry targets now being studied are aluminum, steel and iron ore.
Besides the FTC's interest in shared monopoly cases. Alfred Dougherty Jr., director of the agency's Bureau of Competition, also is grappling with theories and approaches to challenge conglomerate mergers, that is, mergers between companies that are essentially unrelated and therefore do not appear to violate the antitrust laws in the traditional sense of lessening competition between firms or tending to create a monopoly. But there is a continuing debate about whether the mergers are in the public interest because they contribute to an increasing concentration of economic power and in many instances do not appear to result in any economic efficiencies.
Despite the talk about new theories and initiative in antitrust enforcement under the Carter administrationing-in ceremonies last year at the White House were held to be a sign of the increased emphasis on the importance of competition as a national policy -- nothing has reached[WORD ILLEGIBLE]
"Where are all those lawsuits that are going to make the Washington law firms[WORDS ILLEGIBLE] antitrust lawyer with one of he presitigious firms recently joked "Sooner or later they're going to have to bring them."
Pertschuk told congress last year that if the FTC comes to believe existing law cannot be used to challenge conglomerate mergers he may be back to recommend new legislation in any case Dougherty doesn't think the commission will be in a position to bring a significant test case for another year.
Helping both agencies get information about proposed mergers and acquisitions of significant size, as well as giving them an opportunity to delay consummation will be pre-merger notification rules scheduled to take effect in late spring or early summer. The rules implement major section of the Hart-Scott-Rodino Antitrust Improvements Act. This requires 30 day's advance notice of proposed mergers or acquisitions involving a company with $100 million or more in sales or assets and a company with $10 million or more in sales and assets when the transaction would represent 15 percent, or $15 million, of the voting stock or assets of the acquired company. A request for additional information from either agency also can delay the waiting period.
In addition to whatever cases may come out of the agencies this year, the FTC is preparing to use its authority to promulgate industry wide rules for the first time in the competition area in an attempt to cut down on use of case-by-case litigation when a practice believed to be anticompetitive may cut across an industry.
The Antitrust Division has stepped up even more the vigorous intervention before regulatory agencies as a way of increasing competition as much as possible in the regulated industries. It also is expected to continue a record number of grand jury investigations into price fixing and to seek fall sentences as often as possible for law violators.
Both agencies got increases in their proposed budgets for fiscal 1979. The administration asked for a total of $36.4 million for the Antitrust Division up $3.1 million, plus another $10 million for a program of grants to the states for antitrust enforcement. The FTC's budget request totals $66.4 million, up from $62.5 million.
On Capitol Hill, the subcommittees of both houses have one priority: passing legislation to undo the effects of a Supreme Court decision last year. In the case, called "Illinois Brick," the court ruled that only the direct purchasers of a product may sue under the antitrust laws to collect the allowable treble damages for illegal price fixing. The legislation, supported by the administration, also would allow suits to recover damages by consumers or others who may have dealth through middlemen but who paid higher prices because of illegal price fixing and could show they were "injured."
There is little expectation that anything else in the way of major legislation will clear both houses this year.
On the Senate side, Kennedy's Antitrust and Monopoly Subcommittee has tentative plans to delve into the antitrust exemptions the trucking industry enjoys as well as other antitrust exemptions, oil company ownership of alternative energy sources, and increased oversight into enforcement of the Sherman and Clayton acts.
On the House side. "All of the marbles are on Illinois Brick." one committee source says. The subcommittee also may hold hearings on antitrust exemptions and merger enforcement. Last year while the monopolies and commercial law subcommittee did not mark up any legislation, several pieces of legislation affecting competition in the energy area emerged through a subcommittee of the Interior Committee headed by Rep Morris K Udall (D-Artz).