Standardization and Markets: Just Exactly Who is the Government, and Why Should Antitrust Care?

Abstract

We take for granted that the basic choice in public policy is between allocation of resources by government bureaucracy, on the one hand, or allocation by markets, on the other. But that dichotomy is false, and at least under contemporary circumstances it is more accurate to describe the choice as between allocation by one kind of bureaucracy and allocation by a different kind of bureaucracy. This poses a problem for our antitrust policy, because it lacks any coherent guidance as to how to address those entities and transactions that are not governmental but are also not simply market-governed. This paper extensively examines one particular sector that nicely demonstrates how false the simple bureaucracy-markets dichotomy really is: the standard setting sector. Standardization is ubiquitous and hugely influential, but it is difficult to capture as either a government phenomenon or a market phenomenon.

Keywords: Standards, Standardization, Standard Setting Organizations, Antitrust, Competition, Competition Policy, Public Private Distinction, Privatization

JEL Classification: B25, B52, D02, D2, D23, D4, D43, D59, D7, D71, D72, D73, D78, H1, H7, K2, K21, K23, L1, L14, L15, L2