The Rivals Antitrust Can’t See
The next serious competitor may be waiting for a license, or working on a product nobody has seen yet. Neither shows up in today’s market-share figures. And much of the current antitrust debate ignores both of those figures completely, even as it ponders how aggressively the government should reshape markets.
By contrast, a dynamic approach to antitrust can enforce the law vigorously while also recognizing that competition changes over time and that government officials rarely know enough to redesign complex markets. The practical questions are which restraints deserve priority, what evidence should justify intervention, and how the law can leave room for the experiments that produce tomorrow’s competitors.
I propose two commitments.
First, enforcement agencies and policymakers should pay closer attention to government-created barriers to entry. Licensing restrictions, certificate-of-need laws that require approval before a provider can open or expand, discriminatory subsidies, procurement preferences, and legal immunities can all keep would-be competitors out.
Second, enforcers should judge private conduct by its likely effects on innovation and the competitive process. That means considering firms’ capabilities and the costs of mistaken enforcement decisions, rather than treating today’s market concentration figures as the last word. Cartels, anticompetitive mergers, and exclusionary monopolization still warrant action. But size, integration, and commercial success alone do not establish harm.