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Journal of Competition Law and Economics Advance Access published online on August 3, 2009
Journal of Competition Law and Economics, doi:10.1093/joclec/nhp012
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© The Author (2009). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

ORGANIZATION, CONTROL, AND THE SINGLE ENTITY DEFENSE IN ANTITRUST

Dean V. Williamson *

Correspondence: E-mail: dean.williamson{at}usdoj.gov.

JEL: D23, K21, L49

Since at least the 1930s, economists have puzzled over how to delineate the boundaries of a firm. With the advent of antitrust legislation in 1890, American courts have been pressed to consider what constitutes conspiracies between corporate entities to restrain commerce. By the 1980s, courts started to characterize conspiracies by negation—that is, by extending the status of "single entity" to certain types of agglomerations. Efforts both in economics and in the law to sort out what constitutes a "firm" or "single entity" have focused on "control." A difficulty is that neither the law nor economics offers an operationally significant concept of control. Even so, both the law and economics contribute concepts other than control that provide a way of understanding economic organization. These concepts—adaptation and control rights—suggest how one can subsume the sometimes confusing array of single entity tests proposed in the case law within a two-stage sequence of tests.

* Antitrust Division, U.S. Department of Justice. I thank seminar participants at the 2007 conference of the American Law and Economics Association for helpful comments and questions. This paper derives from a larger project by the same title that I presented in seminars at the George Mason Law School, the Swedish Competition Authority, the 2006 conference of European School for the New Institutional Economics, and the 2006 conference of the International Society for the New Institutional Economics. I thank participants in these seminars as well as colleagues at the Antitrust Division of the U.S. Department of Justice for helpful comments and questions. The views expressed in this paper do not reflect those of the U.S. Department of Justice. All errors remain my own.


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