A judge shouldn’t abandon the spirit of antitrust law for JetBlue

If anything has defined the conservative legal movement for the last half century, it’s the understanding that courts simply should declare what the law is, not what it should be. Judges are umpires, not players. They call balls and strikes, not plays. That has been our constitutional order since at least 1803’s Marbury v. Madison.

Conservatives have long carried this mantle and the triumph of textualism and judicial restraint have done important work to end policymaking from the bench. 

And yet, judicial activism remains. Nowhere is this more pronounced than antitrust law and specifically, merger enforcement.

In the Clayton Act, Congress charged the Justice Department with determining whether a merger “may” “substantially lessen competition” or “tend to create a monopoly” in any line of commerce. And since mergers are the most obvious way to achieve monopoly, the Clayton Act allows enforcers to sue to block mergers before they close.

Congress didn’t take a wait-and-see approach to big mergers for good reason. Congress understood in 1914 that accumulated private power is oppressive. It not only could mean worse prices and lousy service, but — as we are starting to see more of in tech markets — it also can lead to more surveillance, stifled political viewpoints, and social engineering through corporate diktats and diversity, equity and inclusion (DEI) initiatives.

The courts have not always remained faithful to the statute. By the middle of last century, antitrust courts assumed the role of market regulators, constructing their own versions of the market and engaging in economic speculation.

In the 1970s, conservative thinkers like Robert Bork and Richard Posner took aim at their incoherence, reframing decades of antitrust and proclaiming the only legitimate goals of antitrust to be enhancing consumer welfare and protecting the competitive process. That reframing gave courts a clear path to permit mergers that protect lower prices, consumer choice and innovation — and stop the ones that don’t.

The standard was also supposed to promote judicial restraint. Even a well-intentioned judge could distort markets if he exceed his limited role. In “The Antitrust Paradox,” Bork wrote that if a judge attempts to weigh competition in one market against a lack of competition in another, “it will find that there are no criteria whatever to guide its decision.”

By setting out neutral parameters for antitrust decision-making, the consumer welfare standard promoted consistency and predictability. And it led courts to follow the statute, reviewing mergers based only on the admissible facts and relevant legal precedents before them. This was a triumph.

Yet recent antitrust trials have shown that judicial activism still lives. Sometimes a court goes out of its way to allow anticompetitive actions despite the evidence. One recent trial in Boston illustrates the problem.

The suit involves JetBlue’s $3.8 billion acquisition of Spirit Airlines. For weeks, the government confronted airline executives with documents showing JetBlue and Spirit knew that the merger would raise prices on more than 100 nonstop and connecting routes where JetBlue and Spirit compete for customers. Witness after witness testified that airlines lower their prices when Spirit flies on a route.

Other documents showed that JetBlue feared Spirit would overtake it by 2025 — and that executives doubted they could get antitrust approval for the deal. And for good reason: Earlier this year, another antitrust court had already ruled that JetBlue’s partnership with American Airlines “replac[ed] full-throated competition with broad cooperation.”

JetBlue and Spirit didn’t dispute the government’s main arguments. They tried to downplay route-level competition by pointing to national shares. What do national shares matter when you only have a few choices at your home airport? They also said other airlines would step in — the industry’s well-documented disfunction, delays, and pilot and crew shortages be damned.

So why did the airlines even let this case go to trial? One theory: Hope springs eternal for judicial sympathy. And they just might get it.

Despite overwhelming evidence, the judge asked: “[If] I enjoin this merger, and Spirit goes belly up. No … immediate prospect of that. But don’t I have to look out into the future?” In other words, he wanted to know if the remote possibility of financial disaster at some unknown time suggests he should allow the merger today.

The judge also probed whether he could salvage the merger by coming up with his own set of divestitures. As the government laid out in its post-trial brief, if JetBlue and Spirit could offer more, they would have.

It all begs the question: Why would a federal judge even consider making himself a part-time investment banker or airline regulator? Judges aren’t experts in the airline business. And their powers are limited. They can’t force Airbus and Boeing to make planes faster. They can’t hire pilots or crew members. They can’t require airport authorities to apportion slots to particular companies. As Bork observed 50 years ago, courts lack competence to roam beyond the law.

In short, this case isn’t just about JetBlue. It poses a fundamental choice for antitrust enforcement: either judges declare what the law is or they usurp policymaking authority. There’s no in between. Let’s hope every antitrust judge exercise judicial restraint.

Joel Thayer is president and board member of the Digital Progress Institute