Antitrust Undone: How Competition Enforcers Are Undermining Competition
Abstract
Through the “Brussels effect,” the EU competition-law model has exerted significant influence over competition regimes worldwide. More recently, this influence has extended to the U.S., where some policymakers and commentators view the European approach as a model for transforming U.S. antitrust law at the federal and state level. The implications for economic growth, innovation, and competitiveness may be profound. While U.S. antitrust law generally requires compelling evidence that challenged conduct harms competition—and takes robust precautions against error costs arising from false-positive enforcement—European competition law often reflects a more structuralist tradition concerned with preserving “fair” competitive outcomes and market structures. This approach has culminated in the EU’s Digital Markets Act’s categorical prohibition of certain practices when undertaken by the largest digital platforms. Yet the comparative economic record strongly cautions against this ex ante “evidence-light” approach to competition policy. During the period in which the U.S. has followed a case-specific ex post approach to antitrust enforcement grounded in the consumer welfare standard, it has substantially outperformed Europe in innovation, startup formation, venture-capital investment, and the rise of global technology leaders. While these divergent outcomes reflect multiple factors, there is reason for concern that jurisdictions that adopt the European competition-law model risk significant policy harms, especially in dynamic technology markets.
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