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.