Originally circulated on 4 December 2016
This article, published in the Georgetown Law Review, is one of the first ones I am aware of on how public concerns about inequality may affect antitrust enforcement and competition policy. It argues that, among a number of other (arguably more important) factors, market power and increased concentration have led to increasing inequality.
Technological change has created more markets with intellectual property protection or network effects, which allow firms to achieve market power. The adoption of more permissive antitrust rules during the past quarter-century has also likely increased the prevalence of market power. Since the returns of market power accrue to capital, which belongs to a minority of the population –usually the richest segment –, this increases the surplus of producers and, with it, inequality.
The article provides a flavour of the times – and includes a useful review of the literature on competition and inequality, and of possible initiatives that agencies/legislators may adopt to incorporate inequality concerns in their actions.