Debunking All the Main Arguments for Antitrust Laws

in #economicslast month



There are a lot of arguments put forward for antitrust laws, but they all have problems.

Source: Debunking All the Main Arguments for Antitrust Laws


This article addresses the major arguments in support of antitrust laws and explains why the issues such laws are designed to prevent aren't issues at all. A couple of these issues include predatory pricing and threat of monopoly. However, even if you agree that these are real threats that need to be feared, the government doesn't exercise its antitrust power in a way that addresses them anyway. In fact, it makes things worse.

A recent example of the government exercising its antitrust power include preventing a JetBlue / Spirit airlines merger. If the merger had occurred, the combined company would have had a 10.5% market share, the fifth largest in the industry. Preventing this merger only serves to protect the larger top four airlines, doing exactly the opposite of what antitrust laws are supposed to do. Other very similar examples of this type of behavior include preventing Albertson's from merging with Kroger and preventing Six Flags from merging with Cedar Fair. Seriously, do Six Flags and Cedar Fair merging represent a serious threat to Americans? There are also a number of other similar recent examples. Some of these smaller companies are likely not to survive exacerbating the problem further.

So instead of the government using antitrust laws to do what they were supposedly designed to do, they do the exact opposite. They prevent smaller companies from merging therefore making it harder for them to survive and therefore help larger companies maintain greater control of the market. Yay government!