The U.S. economy is growing less competitive. Large businesses increasingly profit by taking advantage of their customers and suppliers. These firms can also use sophisticated pricing algorithms and customer data to secure substantial and persistent advantages over smaller players. In our new Gilded Age, the likes of Google and Amazon fill the roles of Standard Oil and U.S. Steel.
Jonathan Baker shows how business practices harming competition manage to go unchecked. The law has fallen behind technology, but that is not the only problem. Inspired by Robert Bork, Richard Posner, and the “Chicago school,” the Supreme Court has, since the Reagan years, steadily eroded the protections of antitrust. The Antitrust Paradigm demonstrates that Chicago-style reforms intended to unleash competitive enterprise have instead inflated market power, harming the welfare of workers and consumers, squelching innovation, and reducing overall economic growth. Baker identifies the errors in economic arguments for staying the course and advocates for a middle path between laissez-faire and forced deconcentration: the revival of pro-competitive economic regulation, of which antitrust has long been the backbone.
Drawing on the latest in empirical and theoretical economics to defend the benefits of antitrust, Baker shows how enforcement and jurisprudence can be updated for the high-tech economy. His prescription is straightforward. The sooner courts and the antitrust enforcement agencies stop listening to the Chicago school and start paying attention to modern economics, the sooner Americans will reap the benefits of competition.
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Table of Contents
I The Market Power Paroxysm and the Antitrust Paradigm 9
1 Market Power in an Era of Antitrust 11
2 The Faltering Political Consensus Supporting Antitrust 32
3 Preventing the Political Misuse of Antitrust 53
4 Recalibrating Error Costs and Presumptions 71
5 Erroneous Arguments against Enforcement 81
II Antitrust Rules and the Information Economy 97
6 Inferring Agreement and Algorithmic Coordination 99
7 Exclusionary Conduct by Dominant Platforms 119
8 Threats to Innovation from Lessened Competition 150
9 Harms to Suppliers, Workers, and Platform Users 176
III Looking Forward 195
10 Restoring a Competitive Economy 197