In a time of rapid technological progress, with digital innovations disrupting previously unassailable market leaders in all sectors of the economy, policymakers, civil society, and the voting public have become increasingly concerned with competition and antitrust issues. How do we ensure that competition on the merits serves the common good by spurring innovation and producing consumer benefits?
Antitrust enforcement and reforms need to integrate market dynamics into antitrust enforcement to encourage innovation, not stifle it. Innovation-based antitrust would not only emphasize the importance of innovation as a source of competition but also encourage a dynamic approach to antitrust enforcement—or “dynamic antitrust”—in which regulators weigh factors such as firms’ dynamic capabilities instead of the traditional approach of static market analysis.
In this conversation series, co-sponsored by ITIF and Competition Policy International, Aurelien Portuese, ITIF’s director of antitrust and innovation policy, sits down with leading scholars and antitrust enforcers in Washington, Brussels, and elsewhere to discuss the path forward in making antitrust a foundation of innovation.
Discussion #1: “Biden Antitrust”
What will President Biden’s competition policy be? He faces immediate antitrust issues, from ongoing lawsuits against market-leading Internet platforms to calls for legislative overhauls of foundational laws like Section 230 of the Communications Decency Act. After the Trump administration, a tumultuous four years in which antitrust was characterized by regular and dramatic changes of attitudes toward tech companies, will Biden now resist the temptation of antitrust populism? Will he embed antitrust enforcement and reforms in an innovation perspective?
For the first discussion in this series on “dynamic antitrust,” Aurelien’s guests included former FTC Chairman William Kovacic and FTC Commissioner Noah Joshua Philips. They considered the policy prospects and institutional possibilities for antitrust in the Biden presidency.
Discussion #2: “Innovation Matters”
Competition policy and antitrust enforcement have traditionally focused on prices rather than innovation. That is because economic theory shows the ways that price competition benefits consumers, and courts, antitrust agencies—and economists have developed quantitative tools for evaluating price impacts. But in his recent book Innovation Matters: Competition Policy for the High-Technology Economy, economist Richard J. Gilbert argues antitrust enforcement should shift from a price-centric competition policy to an innovation-centric one in order to protect incentives for innovation rather than static competition. In a high-technology economy, Gilbert argues, innovation matters.
For the second discussion in this series on “dynamic antitrust,” Aurelien and Richard Gilbert delved into the details of innovation-centric antitrust policy.
Discussion #3: “House Report on Big Tech”
The House Report on Competition in the Digital Markets issued last October constitutes the groundwork for the antitrust reforms expected this year. The report focuses on a handful of tech giants to draw policy recommendations about antitrust enforcement. One of the most dramatic policy recommendations of the report is the structural separation of digital platforms – namely, the break-up of tech giants such as Google, Facebook, Amazon, and Apple. What are the justifications for such a proposal and what are the possibilities for these break-ups to be part of foreseeable legislative changes?
For the third discussion in this series on “dynamic antitrust,” Aurelien and guests including FTC Commissioner Christine Wilson will discuss the report and the future of tech giants in the United States.
Discussion #4: “Big Tech and the Digital Economy”
What is the importance of technological disruption for economic prosperity and for the competitive environment? How should we organize policies to ensure greater innovation? Joseph Schumpeter pioneered the analysis of innovation with his intuitions that an endless process of creative destruction was taking place. In The Power of Creative Destruction, Philippe Aghion and his co-authors provide a refreshing and intellectually stimulating depiction of the Schumpeterian insights applied to our present day's disruptive innovations.
For the fourth discussion in this series on “dynamic antitrust,” Aurelien and Philippe Aghion delve into how legislators and antitrust enforcers should manage the social disruption that innovation creates.
More discussions to follow.