Why the Political Misuse of Antitrust Must be Prevented

By: Jonathan B. Baker (ProMarket)

Antitrust is a powerful machine— both for maintaining competition and for advancing the interests of politicians who wrest control of its operation. From his seat in the Oval Office, Lyndon Johnson held up the antitrust review of a bank acquisition until a newspaper publisher, who also ran one of the merging banks, agreed to reverse the paper’s editorial position against him.

President Nixon ordered the Justice Department not to appeal a lost court challenge to a merger by International Telephone & Telegraph, allegedly in exchange for a substantial contribution by ITT to the Republican National Convention. Nixon also threatened three major television networks with antitrust lawsuits in an effort to extract better news coverage and allegedly accepted a campaign contribution from Howard Hughes in exchange for withholding an antitrust challenge to a planned Las Vegas hotel acquisition.

Like law enforcement generally, antitrust can be corrupted by firms seeking economic advantage, as with Nixon’s alleged deals with ITT and Hughes. It can be misused by politicians for partisan purposes, as with Johnson’s and Nixon’s manipulations of journalists…

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