Antitrust via Rulemaking: Competition Catalysts
The promotion of competition in the American economy is a task that has traditionally fallen to the enforcement agencies at the federal and state level, relying on the main antitrust statutes. However, the challenge of declining competition has also prompted interest in the use of regulatory alternatives to antitrust to “catalyze” competition. The strategy involves using industry-specific statutes, rulemakings, or other tools of the regulatory state to achieve the traditional competition goals associated with the antitrust laws. Hence, “antitrust via rulemaking.”
This paper has two goals. The first goal is to better describe the regulatory tools used by agencies and government – the so-called “competitive catalysts.” This paper attempts to develop both a vocabulary and basic theoretical account that helps to understand how rulemaking can promote competition. It does so by providing a taxonomy of major tools used to catalyze competition.
A second goal of the paper is the admittedly difficult goal of trying to understand why some competition initiatives have worked, while others fail. As these are highly complex industries and regulatory initiatives, any such analysis cannot be definitive. Nonetheless, a study of the efforts to jump-start competition yields patterns from which best-practices might be derived, and from which any future regulator should learn. The paper concludes with a list of best-practices or rules-of-thumb for those who would hope to use laws to catalyze competition in the future.