Dec 20, 2018
Unchecked Antitrust Enforcement Threatens American Innovation
Post by Freedom Partners
Sometimes, a well-intentioned policy can be abused for ill-intended purposes. Such is the case with antitrust enforcement in the United States.
At their core, antitrust laws exist to protect the competitive process that ultimately benefits consumers. The goal is not to break up companies that have grown through successful competition, but to address instances of collusion, price fixing, and other anti-competitive behavior.
Unfortunately, today we repeatedly see antitrust enforcement used as a political bludgeon, and a tool for favored companies to gain a leg-up on the competition.
More than two years after President Trump criticized AT&T’s acquisition of Time Warner, the group continues to battle with the Justice Department over the legality of the deal. And recently, a newly formed alliance of telecom companies, labor unions, trade associations, and public interest groups launched a campaign aiming to stop a different merger between T-Mobile and Sprint.
The motives in these cases appear obvious: special interest groups want lawmakers and law enforcers to use antitrust authority to limit the growth of a key competitor. Because antitrust laws result in a transfer of wealth, they predictably attract political entrepreneurs seeking entry or price regulation to stall or prevent competition.
The problem with this cronyist approach to antitrust enforcement is it hinders American economic growth with no true benefit to consumers. Improper enforcement against “unfair competition” prevents property owners from experimenting with joint ventures and other innovations that can improve consumer welfare. It is important to remember, permanent and assured dominant market position doesn’t exist unless the government guarantees it.
We must protect consumers from companies that abuse their market power to collude, fix prices, or engage in anticompetitive behavior. But wielding the weapon of antitrust authority to favor one competitor over another should concern every American.