Distribution, Competition, and Antitrust / Intellectual Property (IP) Law

Is There Too Much Antitrust Enforcement in High Tech Industries?

The Washington Post last week ran an article covering this topic entitled “In Silicon Valley, fast firms and slow regulators.”

The Post quoted Ed Black, president of the Computer & Communications Industry Association, a trade group that supported the Justice Department’s case against Microsoft: “In tech, market definitions are difficult because companies are changing so fast, and that makes antitrust a blunt tool.”

The issue of “over-enforcement” is a perennial one.  But it’s hard to figure out if, as a global matter, over-enforcement really exists.

Let’s stipulate that from the perspective of an omniscient market observer, there is some optimal level of antitrust enforcement, “O.”

The problem is that it is very, very difficult to objectively determine that overall, actual enforcement exceeds (or fails to meet) “O.”

Antitrust issues and cases are highly fact-specific, and often require detailed and painstaking investigation.  That’s part and parcel of enforcement.  And while one can argue that in any given investigation, enforcement is either appropriate or not, it’s quite difficult to say that overall enforcement levels are not optimal.  Only with 20/20 hindsight from some future vantage point is it really feasible to make such a pronouncement.

Dominant firms, all things being equal, tend to think that enforcement is overly robust.  Their competitors naturally tend to disagree.  Although sometimes it is obvious who is right, often it’s not.  That’s what investigations, pretrial proceedings, motions to dismiss, and settlement discussions are for.

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