Competition Law and Political Influence of Large Corporations – Antitrust Analysis and the Link between Political and Economic Institutions

Abstract

Economic policy determines the intensity of competition in markets. This gives incumbents the incentive to use their financial resources to influence policymaking in order to restrict competition and maintain or increase economic profits. Public authorities should promote that profits be used rather in welfare enhancing or neutral ways. Is competition law an adequate tool to promote this goal? This paper aims to ground the discussion on legal administrability considerations. The focus is therefore on whether we can design legal standards and identify evidence that courts can use to assess the tradeoffs between static efficiency, political influence of large corporations, and innovation. This paper argues that if political considerations are to be taken into account in antitrust analysis, these should be made explicit and looking at the evidence at hand in each case, in order to avoid enforcement guided by assumptions – such as that increases in market concentration always lead to risks in terms of political influence – that can otherwise be revised on a case-by-case basis.