Antitrust Law Daily Wrap Up, ANTITRUST NEWS: AAI working paper surveys recent literature on entrepreneurship and antitrust, (Mar 6, 2015)

By Peter Reap, J.D., LL.M.

Hemi Lee’s working paper “Entrepreneurship and Antitrust: An Annotated Bibliography” surveys the relatively recent literature on entrepreneurship and antitrust and was released on March 5 by the American Antitrust Institute (AAI). The paper is organized into three sections: (1) Defining Entrepreneurship; (2) Entrepreneurship in Various Disciplines; and (3) Entrepreneurship, Competition and Antitrust.

In the Entrepreneurship, Competition and Antitrust section, Lee’s working paper first highlights Robert M. Feinberg’s working paper “State Antitrust Activity’s Impact on Small Business Entry.” Feinberg’s paper examines entry reactions to state antitrust enforcement by firms within three small-business categories: 1-19 employees; 20-99 employees; 100-499 employees. Differences in behavior by broad business sector are also explored.

Next, Richard M. Steuer’s “Jobs and Antitrust” article is mentioned. Steuer notes that cartels and boycotts can hurt both new entrants and the jobs they would create. Current legal standards regarding monopolization and attempted monopolization should be consistent with preserving not only competition, but also entry opportunities and job opportunities. Vertical agreements that foreclose competitors, such as exclusive dealing and tying agreements, may also reduce jobs if they result in anticompetitive foreclosure.

Lee then describes the statement of David A. Balto, “A Progressive Vision for Antitrust Enforcement to Protect the Opportunities for Small Businesses and to Protect Consumers,” before the House Committee on Small Business. Former Policy Director of the Bureau of Competition at the FTC, David A. Balto, points out that antitrust enforcers have been increasingly unresponsive to the concerns raised by small businesses and entrepreneurs. He put forth a progressive view on how to reverse the unintended bias against small business and entrepreneurs in the interpretation and enforcement of the antitrust laws.

Finally in this section, Lee includes the discussion paper “Merger Policy, Entry, and Entrepreneurship,” by Robin Mason and Helen Weeds. The authors argue that merger policy has certain effects on the incentives for entry and ex ante investment decisions in general. The authors challenge the current assumptions made by policy makers. They argue that the consumerist policy maker such as a competition authority should be the one adopting the most lenient merger policy, because entry increases consumer welfare, according to Lee’s summary.

News: Antitrust