New Rules for Trustbusting
As the economy slows, President Bush needs to be more aware than ever that new ideas provide the fuel for growth. That's why he needs to pick an antitrust team that understands its role in preserving the rapid pace of innovation in the economy.
Broadly speaking, there are two schools of antitrust thinking today (page 36). On one side are those who would focus purely on what might be called classic antitrust: cases where companies have sufficient market power to jack up prices to consumers. On the other side are those who accept a broader definition of economic harm. In particular, this new wave of antitrust analysis is concerned with situations where monopolies or oligopolies can impede innovation.
Over the past few years, the antitrust enforcers of the Clinton Administration gradually moved into the second camp. Joel I. Klein at the Justice Dept. and Robert Pitofsky at the Federal Trade Commission recognized the danger that certain mergers and other business deals could squelch innovation--to the detriment of all consumers. In particular, the desire to encourage innovation was a key justification for Justice's lawsuit against Microsoft Corp.
No one would be surprised if the Bush team filed fewer lawsuits than the previous Administration. But it would be a mistake if the new President went with tradition and picked a team that retreated to convention, looking mainly for evidence that companies are harming consumers by raising prices. The textbook rules for trustbusting aren't adequate for an economy powered by fertile but fragile ideas.