Thursday, November 6, 2008
Posted by D. Daniel Sokol
Jon Baker of American University's Washington College of Law has a great short new piece, Dynamic Competition' Does Not Excuse Monopolization, that argues against the position taken by Evans and Hylton in their work The Lawful Acquisition and Exercise of Monopoly Power and its Implications for the Objectives of Antitrust.
ABSTRACT: This comment on a forthcoming article by Keith Hylton and David Evans explains why considerations of "dynamic competition" do not argue against antitrust enforcement. While the prospect of achieving monopoly may foster innovation, that observation misleads as to appropriate antitrust policy unless qualified by the observation that the push of competition generally spurs innovation more than the pull of monopoly. Moreover, the longstanding doctrinal rule that mere monopoly pricing is not illegal should not be read as demonstrating that antitrust law values monopolies for their role in promoting innovation.