Exclusion as a Core Competition Concern

Abstract:     
A contemporary consensus in antitrust discourse inappropriately places exclusionary conduct at the periphery of competition policy, while putting collusion at the core. Contrary to that common view, exclusion is as important as collusion as a matter of precedent, the structure of doctrinal rules, economics, and sound competition policy. Courts treat exclusionary violations as serious competitive problems. An emerging doctrinal rule for truncated condemnation of “plain” exclusionary conduct (practices foreclosing rivals that lack a plausible efficiency justification) parallels the evolving judicial approach toward “naked” collusion. Exclusion and collusion can be understood within a common economic framework that emphasizes the close relationship between the two ways of exercising market power, notwithstanding differences in the mechanisms by which market power is obtained. Moreover, policy concerns about the likelihood or significance of enforcement errors do not justify assigning exclusion a lesser priority than collusion. In fact, anticompetitive exclusion may be the more important problem because it poses a particular threat to economic growth. Recognizing exclusion as a core concern of competition policy along with collusion could lead enforcers to place a higher priority on attacking exclusion, particularly conduct foreclosing potential entry in markets subject to rapid technological change. It would also encourage further development of the doctrinal rule governing truncated condemnation of exclusionary conduct, and protect the legitimacy of the rules prohibiting anticompetitive exclusion against pressure for modifications that would limit enforcement.

Number of Pages in PDF File: 64

Keywords: antitrust, exclusion

JEL Classification: K21, L40

Accepted Paper Series