ICYMI: University Of Southern California Law Professor Jonathan Barnett On How FTC Antitrust Overreach Is An “Assault” On The Booming Start-Up Economy
University of Southern California Gould School of Law Professor Jonathan Barnett is one of the latest experts to call out antitrust regulators’ break from well-established norms by shifting away from the consumer welfare standard. In Professor Barnett’s latest piece published in The Hill, he describes how recent antitrust changes are not motivated by facts and mount an “assault” on the startup economy.
Here are the key takeaways from Barnett’s piece:
1) Recent antitrust actions are not based on facts as regulators are acting on populist sentiment that “big is bad.”
While “taking action based on factually demonstrated theories of competitive harm” has been the long-standing tradition, antitrust regulators are now “fueled by ‘big is bad’ rhetoric” and departing from norms and factual evidence.
— “Antitrust law has a long-standing tradition of taking action based on factually demonstrated theories of competitive harm, rather than mere conjecture.”
— “In a climate of antitrust populism fueled by ‘big is bad’ rhetoric, regulators have increasingly departed from these practices. The result is not merely a diversion of enforcement resources; regulatory interventions that delay or block acquisitions based on speculative theories of market failure are clearly anticompetitive.“
2) Acquisitions are important for start-ups’ growth and innovation.
Acquisitions “efficiently combine a startup’s innovation excellence with an incumbent’s scale, scope and access to capital,” allowing for more growth and innovation.
— “As the business world widely recognizes, incumbent/startup acquisitions efficiently combine a startup’s innovation excellence with an incumbent’s scale, scope and access to capital. This potent synthesis can accelerate the process of converting an innovation into a viable product for market release. Unfounded regulatory interventions based on hypothetical models of market failure harm consumers and startups by obstructing the path to commercialization.”
Additionally, last week, Zachary Karabell’s op-ed in The Washington Post echoed the same criticism of recent action—including a succinct, final message for regulators: “The lesson here is simple: Don’t overreach; follow due process instead.”
Burnett, Karabell, and dozens of other experts are right.
For more from Springboard on the FTC’s overreach, see here, here, and here.