Antitrust law has entered a new phase of an always controversial existence. The role of antitrust in moderating inter-firm relationships depends both on the problems that arise in underlying market relationships and the institutional capacity of antitrust decision-makers to respond to those challenges. For much of the 20th century, the model firm was hierarchical: vertical integration within the business organization was a way of achieving transaction cost efficiencies and delivering higher levels of output at lower prices. Recognition of the benefits of such integration shifted the focus of antitrust law away from traditional concerns about concentrated power, towards a policy focused on economic efficiency. Such a change in emphasis necessarily led to a more modest antitrust policy, since courts were not institutionally well-suited to promoting efficiency and therefore tended to insulate themselves from economic knowledge necessary either to formulate ex ante efficiency rules, or to pursue outcomes that were ex post efficient. However, the past two decades have witnessed a transformation in the paradigmatic model of the firm due to changes in technology and as a result of greater volatility in market conditions. Production is increasingly decentralized, and characterized by looser networks of deeply collaborative relationships, with innovation and speedy adjustment to new market conditions as key aspects of firm success. This article brings together the emerging literature that describes the reasons for these changes in firm organization and the governance problems that arise in the new forms of joint development, whereby firms fear that their collaborators will appropriate the joint fruits of the collaboration. The author argues that antitrust law can play an important role in governing collaborative production relationships, vis-a-vis other potential mechanisms for governance, and identifies normative principles for the design of the institutions and remedies forms of the new antitrust policy.
Antitrust Governance: The New Wave of Antitrust [Conference on Masushita at Twenty]38 Loy. U. Chi. L.J. 593 (2007)
Citation InformationYane Svetiev. "Antitrust Governance: The New Wave of Antitrust," 38 Loy. U. Chi. L.J. 593 (2007)