Preserving a Political Bargain: The Political Economy of the Non-Interventionist Challenge to Monopolization Enforcement

Abstract

The antitrust rules governing exclusionary conduct by dominant firms are among the most controversial in U.S. competition policy. During the first decade of the twenty-first century, they were debated in three arenas, involving legal policy, economic policy, and politics. In each arena, the dispute mainly arose as criticism of traditional standards by advocates of less intervention. Viewed through a political economy lens, the controversy can be understood as a potential challenge to an informal political bargain reached during the 1940s by which competition was adopted as national economic policy in preference to regulation or laissez-faire. From this perspective, and applying insights from the economic literature on the stability of cartels, the non-interventionist criticism is best viewed as a bid for reform of the competition policy bargain, similar in spirit to the reforms undertaken during the 1980s in response to Chicago school criticisms. It could also be interpreted as part of a broader attack on the post-New Deal regulatory state. However understood, the non-interventionist effort to raise the bar for plaintiffs seeking to demonstrate monopolization by exclusionary conduct faces hurdles that limit its prospects for success.