Today, the Justice Department’s Antitrust Division took the strange step of fining a company for violating a consent decree that the government acknowledges is obsolete and inconsistent with current law. That tends to happen when the consent decree is dated March 1960, and the case itself started in 1954. The Eisenhower administration had cracked a Swiss-U.S. “watch cartel,” and just before trial, the 20 defendants settled by agreeing to certain future restrictions on their business practices. As with many older antitrust consent decrees, this one had no time limit, thus it continues in force until terminated by superseding court order. Rolex has filed a motion to terminate the decree based on changes in the watch industry as well as the antitrust laws themselves. The DOJ “tentatively” supports termination, but in the course of reviewing the case, the Antitrust Division decided that Rolex had been violating the decree since 1996. Basically, Rolex was accused of asking for certain contractual terms from its customers that were forbidden by the 1960 order. Thus, Rolex has agreed to pay a $750,000 tribute in exchange for its prospective freedom from the decree.
Thomas Barnett, the newly confirmed head of the Antitrust Division, defended his decision to fine Rolex with this statement: “The rule of law requires companies to abide by a court’s lawful orders or pay the consequences. Even when a company believes that a court’s order is no longer necessary to serve its original purposes, the appropriate recourse is to ask the court to modify its order, not to flout it.” It’s curious that this is essentially the opposite of the Bush administration’s position in defense of its domestic wiretap program. There, the executive has claimed a constitutional “right” to “flout” the law rather than asking Congress to modify a statute that the President has deemed obsolete.