Reality Bites (or Bits): The Political Economy of Antitrust Enforcement

A realistic analysis of antitrust must deal in positive terms with political influences. Political influences are especially strong in the antitrust arena, where decisions and policy measures often significantly affect the profitability of market players. It is thus important, in designing an antitrust regime, to acknowledge such influences and to design institutions and methods that will harness political aspirations to the achievement of antitrust goals. Accordingly, the goal of this article is to analyze the different effects political motivations might have on antitrust, and to suggest tools that may minimize such effects. A short theoretical analysis of the political economy of antitrust enforcement is followed by some recent and interesting examples of cases in which political influences shaped antitrust decisions. The conclusion that is reached is that we should wisely recognize that politics cannot be simply ignored. Building upon this conclusion, the article then introduces and analyzes some institutional design mechanisms that can be applied in order to reduce political pressures and even harness them for the goals of antitrust.