Category: Commentary

Tech is testing the limits of a half-century experiment in antitrust in which predictions made by experts have guided enforcement of the law.

Over that time, it has become increasingly common for the lawfulness of a given merger or monopolist’s conduct to be decided by predicting its actual effects on competition. On first blush, it seems a sensible approach. Ostensibly, it is a rational replacement of what came before it, which was a set of hard-and-fast rules that trained antitrust on the protection of market conditions believed conducive to competitive outcomes, with less regard for how competition was actually impacted in an individual case.

But lawyers and economists may have jumped the gun in thinking themselves up to the task. A half decade of experience with the predictive approach to antitrust, bolstered by research in uncertainty and decision-making in other fields, suggests that little more than wishful thinking may support the premise that predictions about complex markets can be accurate enough to guide competition policy. And to make matters worse, the prediction-making apparatus has been focused exclusively on an overly restrictive subset of competition concerns that only serve to help consumers to buy more things for less money. The result has been the consolidation of large swaths of the economy.