Tweet [1]
In the same week that the E.U. announces its crack down on Intel [2] for allegedly monopolistic practices, the Obama administration announces its intent, in effect, to return antitrust policy in the U.S. to what it was during the hyperactive 1960s and early 1970s. How progressive.
Mark Perry, of Carpe Diem, has the splendid post on the E.U.'s unfortunate action against Intel [3].
And I sent the following letters recently, on this topic. This one is to the New York Times:
enforcement policy against corporations that use their market dominance
to elbow out competitors or to keep them from gaining market share"
("Administration Plans to Strengthen Antitrust Rules [4]," May 11). [Notice the administration's emphasis on protecting competitors — that is, producers.]
Anyone
unaware that this new aggressiveness will, in fact, suppress
competition is not familiar with antitrust's history. Firms without
special government privileges successfully compete for market share
only by pleasing consumers. But ability to sic antitrust enforcers on
rivals will encourage many firms now, as it has in the past, to compete
for market share not by pleasing consumers but by pleading with
bureaucrats and courts to hamstring rivals that are more creative or
more efficient.
Sincerely,
Donald J. Boudreaux
This one is to the Wall Street Journal:
policy will stifle competition under the guise of fostering it
("Target: Intel, and Competition [5]," May 14). But this fact is
unsurprising because governments respond only to interests that are
organized and visible.
Genuine competition relentlessly
pressures existing firms to work harder to satisfy consumers, and it
inevitably turns many firms that are today's industry leaders into
tomorrow's bankrupts. In doing so, competition clears the way for the
creation of new firms and industries that today are unimagined – and,
hence, that today are invisible, politically unorganized, and silent.
The
invisible hand, being unseen, will always be at a political
disadvantage compared to the visible palms – palms outstretched to the
state by beggars seeking special privileges.
Sincerely,
Donald J. Boudreaux
There's precious little evidence that antitrust regulation is necessary to protect consumers from monopoly power — and considerable amounts of evidence that it harms consumers by thwarting competition (both intentionally [6] [also here [7]] and as a result of bureaucratic and judicial ignorance [8]). The E.U.'s recent persecution of Intel is, sadly, par for the antitrust course.
Here's a post on antitrust that I wrote in February of 2005 [9].