Should Antitrust Bite the Dust?

Since August can be a bit somnolent, I thought I’d liven things up a bit by reprinting two letters to the editor that appeared in The Wall Street Journal in reaction to the blog we reprinted in our August Blog ‘o Blogs. In that article, Tim Muris offers offer five principles to guide competition policy toward successful innovators, see here for a link to that article.

The first letter came from David Heiner, Chief Competition Counsel for Microsoft, who somewhat understandably applauded Mr. Muris:

“Regarding Timothy J. Muris’s “Antitrust in a High-Tech World” (op-ed, Aug. 11): Mr. Muris offers five principles to guide competition policy toward successful innovators. Every one of them is sound. Every one of them should be followed by competition law regulators world-wide. None of them, however, justifies exempting IBM or other successful innovators from scrutiny. In an increasingly connected and digitized world, interoperability among competing products is more important than ever and a likely subject of antitrust review.

Companies that are dominant may have to license some of their intellectual property (for a royalty) in order to enable interoperability that fosters competition and benefits consumers. That, of course, is one of the lessons of the Microsoft case, on both sides of the Atlantic.”

Nothing terribly exciting there, but I found the following reaction by Edwin Rockefeller, former chairman of the American Bar Association’s section of antitrust to be curious and curiouser — and maybe just a bit over the top:

Time for Antitrust to Bite the Dust

It is discouraging to read that a counselor to Microsoft Corp., the foremost victim of antitrust in our time, has joined the chorus of antitrust professionals who are singing that antitrust is, or can be, “sound” (“The High-Tech World Still Needs Antitrust,” Letters, Aug. 16).

Antitrust is unsound as economics. It is based on a definition of competition that is neither possible nor desirable—undifferentiated products in price equilibrium. It is unsound as law because it provides no coherent set of ascertainable rules to guide conduct. It is unsound as a matter of fact, because it is based on a belief in the false legend of Standard Oil.

Antitrust is a religion carried on by a cult of professionals. It gives government officials the power to interfere whimsically with freedom of contract, frequently on behalf of losers. It is a needless drag on the economy and of little demonstrable public benefit.

What do you think?