Antitrust fails---creates huge uncertainty, destroys innovation, is exploited by rivals, and succumbs to political pressure.

Second, antitrust laws are fluid, nonobjective, and often retroactive. Because of murky statutes and conflicting case law, companies never can be quite sure what constitutes permissible behavior. Conduct that is otherwise legal somehow morphs into an antitrust violation. Normal business practices—price discounts, product improvements, exclusive contracting—become violations of law. When they’re not accused of monopoly price gouging for charging too much, companies are accused of predatory pricing for charging too little, or collusion for charging the same.

Third, antitrust is based on a static view of the market. In real markets, sellers seek to carve out mini-monopolies. Profits from market power are the engine that drives the economy. So, what might happen in a utopian, perfectly competitive environment is irrelevant to the question whether government intervention is necessary or appropriate. The proper comparison is with the marketplace that will evolve if the antitrust laws, by punishing success, eliminate incentives for new and improved products. Markets move faster than antitrust laws could ever move. Consumers rule, not producers. And consumers can unseat any product and any company no matter how powerful and entrenched. Just ask WordPerfect or Lotus or Polaroid.

Fourth, antitrust remedies are designed by bureaucrats who don’t understand how markets work. Economic losses from excessive regulation can do great damage to producers and consumers. But government moves forward in the name of correcting market imperfections, apparently without considering the consequences of government intervention. Proponents of antitrust tell us that government planners know which products should be withdrawn from the market, no matter what consumers actually prefer. The problem with that argument is that it leads directly to paternalism, to the idea than an elite corps of experts knows our interests better than we do—and can regulate our affairs to satisfy those interests better than the market does.

The real issue is not whether one product is better than another but who gets to decide—consumers, declaring their preferences by purchases in the market or specialists at the Justice Department or the Federal Trade Commission rating the merits of various goods and services. When we permit government to make such decisions for us, and we allow those decisions to trump the subjective choices of consumers, we abandon any pretense of a free market. In the process, we reduce consumer choice to a formalistic appraisal centering on technical features alone, notwithstanding that products are also desired for quality, price, service, convenience, and a host of other variables.

Fifth, antitrust law is wielded by business rivals and their allies in the political arena. Instead of focusing on new and better products, disgruntled rivals try to exploit the law—consorting with members of Congress, their staffers, antitrust officials, and the best lobbying and public relations firms that money can buy. Soon enough, the targeted company responds in kind—using political influence to bring down competitors. That agenda will destroy what it sets out to protect. Politicians are mostly order takers. Therefore, we’ll get the kind of government we ask for—including oppressive regulation. Citizens who are troubled by huge corporations dominating private markets should be even more concerned if those same corporations decide that political clout better serves their interest—politicizing competition to advance the private interests of favored competitors.

Sixth, barriers to entry are created by government, not private businesses. Under antitrust law, the proper test for government intervention is whether barriers to entry foreclose meaningful competition. But what is a “barrier”? When a company advertises, lowers prices, improves quality, adds features, or offers better service, it discourages rivals. But it cannot bar them. True barriers arise from government misbehavior, not private power—from special-interest legislation or a misconceived regulatory regimen that protects existing producers from competition. When government grants targeted tax benefits, subsidies, insurance guarantees, and loans, or enacts tariffs and quotas to protect domestic companies from foreign rivals, that creates the same anti-competitive environment that the antitrust laws were meant to foreclose. That’s how barriers to competition are born and nurtured at public expense. The obvious answer, which has little to do with antitrust, is for government to stop creating those barriers to begin with.

Seventh, competitors can be mischaracterized as monopolists when markets are defined too narrowly. As a first step, anti-monopoly regulation requires a definition of the relevant market. That step can determine whether, and the extent to which, companies are exercising sufficient market power to justify government intervention. Consider social media enterprises. Is Facebook, for example, so dominant that its customers are harmed and its rivals extinguished? Some skeptics would note that Facebook is a zero-priced service, and that advertising, driven by consumer data, is more plentiful and less expensive than ever. Others would note that billions of users patronize social media alternatives such as TikTok, Twitter, Reddit, and LinkedIn. But perhaps the more important observation is this: The relevant market is not only social media. Facebook’s mission is to communicate with its customers and provide a forum for the exchange of information. That same mission, broadly defined, describes not only social media, but also television, radio, newspapers, magazines, direct mail, movies, books, and more. Which companies, within that spectrum, comprise the relevant market? There is no definitive answer. 

Eighth, antitrust will inevitably be used by unprincipled politicians as a political bludgeon. Too often, the executive branch has exploited the antitrust laws to force conformity by “uncooperative” companies. Remember when President Nixon used the threat of an antitrust suit against the three major TV networks to extort more favorable media coverage. On a widely publicized tape, Nixon told his aide, Chuck Colson, “Our gain is more important than the economic gain. We don’t give a goddamn about the economic gain. Our game here is solely political.” If Nixon were the only culprit, that would be bad enough. But today’s crusade against Apple suggests that the Biden administration seeks political dividends by attacking a huge and immensely rich corporation, notwithstanding the economic toll. The lesson is clear: the threat of abusive public power is far larger than the threat of private market power.