Politicians and pundits across the ideological spectrum often call for greater competition in the marketplace. While their favored means vary widely, the view that current antitrust law is necessary to ensure competition, and should be applied more vigorously than it has in recent history, is common across the American political landscape. As this paper demonstrates, a rethink of the existing antitrust paradigm is long overdue.
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Ten Areas Where Antitrust Policy Can Move on from the Smokestack Era
Op-eds, articles, and commentary from CEI experts on antitrust.
Vice President for Strategy and Senior Fellow
Forbes – February 17, 2020
Forbes – January 7, 2020
Forbes – December 2, 2019
When Commerce Is Not Enough
Law and Liberty – November 26, 2019
The Wall Street Journal – August 12, 2019
Big Tech vs. Free Speech? It's Not that Simple
Fox Business – May 22, 2019
Fred L. Smith Jr.
Forbes – September 3, 2013
CEI.org – September 1, 1999
Vice President for Strategy and Senior Fellow
CEI.org – May 31, 2018
CEI – December 14, 2017
Washington Examiner – June 23, 2017
CNET – October 25, 2012
Research Fellow and Regulatory Counsel
Founder; Director of Center for Advancing Capitalism
Associate Director, Center for Technology and Innovation
Fortune – July 17, 2019
Fox News – June 11, 2019
Questions and answers on CEI's antitrust policy position.
The Competitive Enterprise Institute (CEI) launched a new video, “Antitrust Explained,” disputing recent calls by politicians and academics to use antitrust laws and regulations to break up large companies.
The video provides a history of antitrust policy in the United States and explains the negative impact these laws and regulations can have on the market, consumers, and our economy.
Today’s body of antitrust laws is the culmination of over one hundred years of unclear objectives, contradictory interpretations, and controversial court decisions. At its most basic, antitrust is regulation restricting certain business arrangements and decisions. In the U.S., the stated aim of antitrust law is preserving competition in the marketplace to the benefit of consumers.
2. Why was antitrust created and what’s its history in the U.S.?
The earliest impulses towards federal antitrust legislation grew out of dissatisfaction with the railroads of the late nineteenth century, which were themselves government granted monopolies. When the problematic results of this government-created uneven playing field began to surface, so did political alliances calling for corrective government action. To that end, rate discrimination was outlawed with the passage of The Interstate Commerce Act passed in 1887. By 1888, antitrust planks appeared in both of the major political party’s platforms..
How Antitrust Regulation Hinders Innovation and Competition.
Regulators should use the law proactively to break up companies that are abusing their market power and restore a competitive market. The size of a company is a good guide as to when this should be done.
Antitrust law is unnecessary. Market processes routinely undermine monopolies—and attempts to create monopolies. Laws against “unfair competition” prevent property owners from experimenting with joint ventures and other innovations that can improve consumer welfare.
Abuse of market power is rare and dominant market positions can be achieved through delivering improvements in consumer welfare. Therefore, antitrust laws should be used not to break up companies that have grown big through successful competition, but to address instances of collusion, price fixing, or other anti-competitive behavior.
Few economic concepts elicit such strong reactions as that of monopoly, and the policy intended to address it—antitrust regulations (called competition policy in the European Union). Yet, both supporters and opponents of antitrust regulations agree on one fundamental point—that effective competition is vital to the American economy and the welfare of its citizens. However, they differ in how the law should encourage this. There are essentially three schools of thought regarding antitrust policy:
Antitrust Skeptic's Bibliography
Selected readings on antitrust.
Books and Chapters
For more than two decades, the willingness of policy makers to rethink the presumption that economic regulation automatically benefits consumers has driven the deregulation of the transportation, telecommunications, banking, and electricity sectors. Yet antitrust regulation enjoys continued esteem in both the business and popular press. High-profile antitrust enforcement actions increasingly constitute a business hazard for aggressive, successful firms, threatening to disrupt innovation and economic growth.
Since economic regulations—including antitrust—transfer wealth, they inevitably attract political entrepreneurs seeking entry or price regulation to hobble or preempt competition. Thus, a more skeptical interpretation of antitrust activism is that antitrust benefits political "entrepreneurs" rather than consumers. Such enforcement for competitive advantage often harms consumers by increasing prices and decreasing output by undermining little-understood efficiencies. Rethinking the true impact of these practices, from "collusion" to "predatory pricing" to "discrimination," should be a goal of policy makers.
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