Economic Note / June 2005
“The world of antitrust is reminiscent of Alice’s Wonderland: everything seemingly is, yet apparently isn’t, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet ‘too much’ competition is condemned as ‘cutthroat.’ It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as ‘enlightened’ when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge’s verdict – after the fact.
In view of the confusion, contradictions, and legalistic hairsplitting, which characterize the realm of antitrust, I submit that the entire antitrust system must be opened for review. It is necessary to ascertain and to estimate: (a) the historical roots of the antitrust laws, and (b) the economic theories upon which these laws were based.”
Much of the controversy about the true nature of the European Union’s policy and legislation stems from a clear contradiction between the terms used and their real meaning. “Free competition” might be a good example of how the draft Treaty Establishing a Constitution for Europe obscures language. In Article I-3, second paragraph, one can read, “the Union shall offer its citizens […] an internal market where competition is free and undistorted.” What does undistorted add to free? It actually makes room for the alleged necessity of state intervention in the market through antitrust policy and legislation.