Law as Antimonopoly

Abstract

If the state is a force monopolist, as Max Weber famously claimed, then the law is a kind of antitrust policy. The state’s monopoly on force makes the state a monopoly seller of security. The public pays with taxes. Under tax law, those who refuse to pay are jailed—the state denies them security. The criminal law secures the state’s monopoly on the sale of security by imprisoning those who seek to compete with the state in the exercise of violence (or the provision of security therefrom). Constitutional law regulates the exercise of the state’s monopoly power, primarily by guaranteeing the right to vote. That right makes the state into the equivalent of a consumer cooperative; those who buy protection from the state by paying taxes choose the state’s management. Viewing the state as a monopoly seller of security, and the legal system as a means of regulating that monopoly, affords a useful baseline against which to compare antitrust, which is dedicated to regulating private monopolies as opposed to the state. Unlike proposed antitrust legislation, which would make self-preferencing by online platforms illegal, constitutional law permits the state to self-preference. All private enterprises compete on the security platform provided by the state. Constitutional law permits the state to own (or nationalize) those enterprises as needed to benefit the public. What prevents the state from abusing this power are laws that prohibit the state and its agents from turning a profit. All revenues generated by the state must be spent on operations. Government officials who profit from public funds go to jail. This suggests that legislators seeking to regulate the power of online platforms should focus on regulating the fees platforms charge competitors and consumers, and allow online platforms to engage in self-preferencing when doing so would benefit consumers.

Keywords: antitrust, big tech, platform monopoly, platform regulation, competition, monopoly, vertical integration, constitutional law, public law, private law, digital monopoly, tech giants

JEL Classification: K12, L40, P00