Tensions between Antitrust and Industrial Policy

22 Pages Posted: 7 Apr 2015 Last revised: 28 Oct 2015

See all articles by D. Daniel Sokol

D. Daniel Sokol

University of Florida Levin College of Law

Date Written: July 27, 2015

Abstract

Sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for privileged groups or industries. Unfortunately, industrial policy seems to be alive and well both within antitrust law and policy and within a broader competition policy worldwide. This Article identifies how industrial policy impacts both antitrust and competition policy. It provides examples from the United States, Europe and China of how industrial policy has been used in antitrust. However, this Article also makes a broader claim that the overt or subtle use of industrial policy in antitrust and a broader competition policy is a global phenomenon. The United States’ experience teaches that industrial policy can be pushed to the margins in antitrust (and the failure to push such industrial policy to the margins produces economic inefficiencies). Further, successful competition advocacy can reduce the competitive distortions that industrial policy may have on of a broader competition policy more broadly.

This Article first identifies the relationship between antitrust and industrial policy. It provides examples of industrial policy in the antitrust experiences of the United States, Europe, and China. Second, the Article explores how a lack of procedural fairness in antitrust may be abused by inefficient competitors as a way to push industrial policy goals. Third, the Article demonstrates how industrial policy hurts a broader competition policy and suggests potential competition advocacy interventions on the part of antitrust authorities to limit the anticompetitive effects of such policy. The Article concludes with the suggestion that industrial policy is in fundamental tension with promoting consumer welfare and fostering long-term economic growth and should be abandoned both explicitly and implicitly extracted from the antitrust enterprise. Further, antitrust agencies should implement more competition advocacy interventions to stop the spread of industrial policy in antitrust globally.

Keywords: antitrust, competition law, industrial policy, industrial organization

JEL Classification: K21, l40

Suggested Citation

Sokol, D. Daniel, Tensions between Antitrust and Industrial Policy (July 27, 2015). George Mason Law Review, 22: 1247-1268, 2015. Available at SSRN: https://ssrn.com/abstract=2590266

D. Daniel Sokol (Contact Author)

University of Florida Levin College of Law ( email )

Spessard L. Holland Law Center
P.O. Box 117625
Gainesville, FL 32611-7625
United States
(352) 273-0968 (Phone)
(352) 392-3005 (Fax)

HOME PAGE: http://www.law.ufl.edu/faculty/d-daniel-sokol

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