Document Type

Essay

Degree Name

Master of Laws

Abstract

From the antitrust law of both the US and Japan, one question has always been in my mind – why is analysis still fixated on immediate observable, superficial facts like the level of cost and quality? For purposes of practice – neither services nor products can be entirely represented by these dimensions alone. More and more creativity, more choice, and the way in which current market conditions will change our lives for good in the future – these are all important issues. However, these elements are all part and parcel of the ongoing process of competition and have effects that develop only in the long run. If the analysis remains exclusively concerned with short-term, readily seeable price and quality fluctuations, these deeper and more significant aspects may be neglected by present-oriented myopia.

This Article describes measures addressing price and quality effects as “static analysis,” and in terms of innovation, potential competition, and structural market evolution as “dynamic analysis.” Focusing on anticompetitive aspects of innovation in dynamic competitive relations it analyses the limitations of the static analytical paradigm and attempts to develop an evaluative framework by combining welfarist and structural– institutional approaches.

Based on a comparative analysis of U.S., European Union, and Japanese antitrust enforcement, the paper examines the asymmetrical uptake of innovation as a competitive parameter into each of the respective jurisdictions. The United States combines analytical sophistication and judicial reluctance, as evidenced by the divergent results in FTC v. ii Meta (2025), Epic v. Google (2025), and United States v. Google (Search) (2024–2025). In particular, the European Union has formalized innovation analysis with the Significant Impediment to Effective Competition (SIEC) test and Innovation Theory of Harm as proposed by Dow/DuPont, Bayer/Monsanto, Illumina/Grail, guided by structured methodologies of innovation-space analysis and R&D pipeline mapping. Japan, while doctrinally adaptable through its Antimonopoly Act, has only recently taken into the actual realm of formal enforcement their theoretical recognition by the JFTC in April 2025 issued a cease-and-desist order for Google LLC.

Leveraging this comparative groundwork, this paper forms a refined analytical model synthesizable as the following: an innovation diversity index (IDI) and its quality-weighted variant (𝐼𝐷𝐼Q) used to operationalize structural changes in innovation competition; an expected welfare loss (EWL) model combining distribution-adjusted innovation output, probability of foreclosure and time-horizon discount factor, and a dynamic welfare–institutional duality (DWID) framework merging Kaplow’s welfare consequentialism and Wu and Khan’s institutionalism. The model is operationalized by a dual enforcement framework, one that splits structural screening from substantive judgment, provides for heavy-tailed innovation returns via a precautionary calibration, and promotes adaptive interventions that evolve in step with technological growth. The paper shows that protecting the ability to innovate is a central constitutional aim of competition law and that antitrust need to transition from a retrospective regime of price command and control to an evolutionary regime of innovation governance.

Disciplines

Antitrust and Trade Regulation | Comparative and Foreign Law | Law

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