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Business Management Review | Thursday, August 18, 2022
People live in an era where antitrust enforcement and the external business environment are more interwoven. The COVID-19 pandemic has heightened society's expectations of enterprises and accelerated trends toward digital transformation, placing a premium on resilience for nations and organizations.
FREMONT, CA: Enforcement of antitrust laws, corporate ecosystems, and cultural expectations are more linked than ever before in history.
Combined with a more politicized political climate, experts anticipate governments and antitrust agencies worldwide will adopt a more aggressive approach to enforcement in 2022, utilizing new and developing laws and regulations to target a broader array of industrial and public policy challenges.
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Expansive antitrust
Each of these forces directly impacts antitrust, where the rapid pace of change is compelling governments to adopt a more expansive approach by enacting new laws. It requires enforcers to address broader objectives, including economic growth, innovation, productivity, consumer protection, and carbon reduction.
Antitrust at a turning moment
In recent years, policymakers, enforcers, and scholars have questioned whether years of perceived underenforcement have led to higher consumer prices, larger corporate profits, weakened small firms, lower employee compensation, and increased income inequality. Initial research revealed that US industries had become more consolidated in the absence of vigorous antitrust regulation, and those vast corporations had exploited their unrestrained market dominance to increase profits at the expense of consumers and workers. Critics of the current quo contended that antitrust had lost its direction and that enforcers supported corporations over competition too frequently. While there was some evidence of these tendencies worldwide, the research was far more contradictory and frequently showed constant concentration levels in the EU and the UK. This increased fears that US enforcement was out of step.
As a result of measuring concentration at broad sectoral levels instead of product levels, scholars pointed out that the original studies offered little about competition. Studies later attempted to undermine the popular narrative by demonstrating that businesses were embracing technology and innovation to increase scale and expand geographically into a greater number of markets, which resulted in more competitive companies and more efficient firms. Minor modifications, such as additional funding for authorities, may still be necessary, but these findings indicate that a comprehensive revision of the antitrust laws is unwarranted.
Insofar as current antitrust measures are deemed inadequate, legislatures are also contemplating reforms that would give enforcers more authority to carry out their objectives, particularly in police competition in the rapid-fire digital economy. However, policymakers and antitrust enforcers worldwide have underlined the need for aggressive action and accepted demands to reenergize antitrust enforcement to address industrial and public policy concerns. Many have also called for antitrust to address broader social and economic challenges beyond consumer welfare, including income and racial inequalities, the demise of small businesses, and sustainability goals.
How exactly these shifts will manifest in the following years remains to be seen. However, antitrust is at a turning point. The question is no longer whether antitrust will alter but how much.
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Tech in the crosshairs
President Biden has made aggressive antitrust enforcement a priority of his administration in the US, appointing progressive heads to federal agencies and pushing for "vigorous" enforcement of antitrust laws. Therefore, it is surprising that American technology is in the spotlight.
Industries undergoing change
The antitrust/consumer protection lens is similarly trained on the technological change of financial services, manufacturing, and energy as it focuses on corporations' partnership agreements, data ownership policies, and the use of government support. In addition to confronting regulatory challenges as they modify their processes to support carbon reduction objectives, many of these enterprises face new regulatory obstacles.
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