Principles of Dynamic Antitrust: Competing Through Innovation
GAICIL Insights
This report sets out the principles of dynamic antitrust. It rejects static analysis based on firm size, industry structure and prices, and recognizes that market power can drive innovation while disruptive innovation keeps market power in check.
For AI, where leadership changes quickly and investment needs are huge, this framework underpins much of how we assess competition.
Abstract
It is time for antitrust policy to reject static models of market analysis and enforcement that rely too much on simplistic indicators such as firm size, industry structure, and prices. Regulators should instead adopt a dynamic approach that recognizes how market power can drive innovation—and how disruptive innovation keeps market power in check.1
Conclusion
The current pendulum swing between Chicagoans’ approach of the consumer welfare standard and the neo-Brandeisian approach of the so-called and undefined “public interest standard” is not only unhelpful but harmful. It is unhelpful because the static approach remains the prevailing analysis framework. It is harmful because neither approach embraces the dynamic view based on the nature of the evolutionary process of competition.
Antitrust enforcement needs to move beyond static competition and endorse dynamic competition. Antitrust enforcers can no longer overlook that innovation is the source of competition—not merely competition’s unexpected and underestimated result. Consequently, the antitrust enforcement and institutional principles must be revamped based on a more realistic, less-formalized model.
Takeaway: Regulators should instead adopt a dynamic approach that recognizes how market power can drive innovation—and how disruptive innovation keeps market power in check.
Conclusion quoted verbatim from the report.
Notes
- Aurelien Portuese, Principles of Dynamic Antitrust: Competing Through Innovation (Info. Tech. & Innovation Found., June 14, 2021), https://itif.org/publications/2021/06/14/principles-dynamic-antitrust-competing-through-innovation/. Summary quoted verbatim from the ITIF publication page, https://itif.org/publications/2021/06/14/principles-dynamic-antitrust-competing-through-innovation/. ↩
Cite as: Aurelien Portuese, Principles of Dynamic Antitrust: Competing Through Innovation (Info. Tech. & Innovation Found., June 14, 2021), https://itif.org/publications/2021/06/14/principles-dynamic-antitrust-competing-through-innovation/
Header image: Silicon wafer researcher.jpg by U.S. Department of Energy, Public domain, via Wikimedia Commons.
