Christopher Sagers, author of United States v. Apple.

A serious problem with U.S. antitrust law today is that big monopolistic firms like Amazon.com Inc. are wielding too much economic power, but general counsel and their companies hold a key to changing that, according to antitrust expert Christopher Sagers.

Sagers, an author and professor at Cleveland–Marshall College of Law, has written a new book, “United States v. Apple: Competition in America” under Harvard University Press on sale Sept. 19. The book is a study of the 2014 e-books price-fixing case involving Apple Inc. and five publishers in an effort to break up Amazon's dominance in the market.

United States v. Apple, by Christopher Sagers.

Before teaching, Sagers practiced law for four years in Washington, D.C., first at Arnold & Porter and then at Shea & Gardner.

He recently spoke with Corporate Counsel about the book, antitrust law in America today and important lessons for general counsel. Here are excerpts from the interview, edited for brevity and clarity:

Corporate Counsel: Why did a music major and composer from Iowa decide to make a career in antitrust law?

Christopher Sagers: That's a complicated question but the brief answer is I was a young radical who went to law school because I wanted to speak truth to power. This seemed like a good way to do it. I had no economics training and hadn't even taken a math class since high school. I thought I would never understand economics and thought it was inherently bad. It turns out that's not true; it is the most fascinating thing in the world.

CC: When you say speak truth to “power,” what did you mean by that word? 

CS: I meant the corporations.

CC: Please briefly summarize your new book.

CS: The book takes an important federal lawsuit from five years ago as a case study and examines it in depth, using it as opportunity to talk about a much bigger problem. That problem is why it seems like American antitrust doesn't work very well, despite how we often describe ourselves supporting markets and claiming to care about it.

I think Americans don't really deeply believe in competition very much or in the markets as regulators.

People's fear was that the real problem was not the price-fixing but was Amazon's control. People thought it a perversion of antitrust law to attack companies trying to protect themselves from Amazon.

The publishers argued that their case was special and needed to be exempted from the rules. People have been pleading for special exceptions since the 1890s. If courts have to examine special circumstances in every antitrust case, then enforcement will grind to a halt. We are seeing that now. In order for the law to work, we must be skeptical of those claims.

I can't say that there are no special products deserving of clemency, but unless we can have confidence that markets are similar enough that we can impose simple rules in all cases, then there can be no antitrust law.

CC: What can general counsel learn from this book?

CS: The case is an object lesson on how some companies in the world are being very incautious on antitrust, leading them to take risks—perhaps in part because they feel antitrust may be a dying policy that is not enforced much anymore.

The lesson is that if you and your executives engage in this [price-fixing], you are probably going to get sued. Those publishers met frequently over several years, discussed prices and ultimately reached a price-fixing agreement. They appeared to think it wasn't that risky. More surprising yet was the evidence showed that the lawyers from Apple and other companies were involved in some of these conversations. When it was discovered that the lawyers knew, that looked very bad for the defendants.

So the immediate lesson for general counsel is that traditional care or caution with respect to competitors is still required because there still is significant risk, even if you believe you are right to do it. They [defendants] still really believed they were right. They litigated all the way up [to the U.S. Supreme Court]. They were wrong.

CC: Are there other lessons?

CS: One legal lesson for lots of big companies right now is there's admittedly a serious problem in antitrust law that there are big monopolistic firms like Amazon that exercise a lot of power. And if you are a company that deals with a distributor that has a lot of power, you are at a disadvantage and you may be tempted to join ranks with fellow suppliers.

A lot of companies out there feel they are wronged by a monopolistic competitor and the law isn't giving them a good alternative to deal with it. Unfortunately right now the government doesn't seem to care about antitrust enforcement unless it's price-fixing.

CC: Is there an alternative for them?

Yes, the “People's Court” solution. Sue the competitor for abuse of unilateral power. This is a point that matters for general counsel. Private people can sue under antitrust law.

My message to all those general counsel looking for a plausible alternative is why don't you start funding private monopolization suits. It would be very expensive, yes, but someone has to start suing the monopolies and at present the federal government is not.

I wish that instead of taking the abuse or doing something illegal, the companies try to make antitrust laws better. They already spend a lot of money on lobbying Congress for relief, usually for an exception to antitrust laws. Historically such exemptions have not solved the problem in the long term. It's a really bad model.

Instead of wasting money seeking exemptions that Congress probably won't adopt and that won't work anyway, put all that money into lobbying to strengthen antitrust laws and to fund better enforcement. Or, into bringing the lawsuits yourselves.

CC: What are your thoughts about the ongoing congressional hearings into changing antitrust law?

CS: I am frustrated with the chair of the antitrust subcommittee, who is sponsoring a bill to create a new exemption. It's a bad idea, confusing and counterproductive. Just come up with money for agencies to do their job. Just strengthen the laws we have.

There is a deep political implausibility that anything [positive] will happen. Congress has not meaningfully changed antitrust laws in 50 years, except to increase criminal penalties for price-fixing. I wish I could be more optimistic, but I don't think they will accomplish anything.