Entrepreneurship and Antitrust Enforcement

Published date01 December 2016
Date01 December 2016
ABX673950 595..598 Article
The Antitrust Bulletin
2016, Vol. 61(4) 595-598
Entrepreneurship and Antitrust
ª The Author(s) 2016
Reprints and permission:
DOI: 10.1177/0003603X16673950
Shubha Ghosh*
Antitrust enforcement can promote entrepreneurship by creating an economic environment that is
more suitable to market entry by start-up firms that challenge existing business models. Several
reforms for improving antitrust enforcement would be desirable. First, antitrust enforcement can be
procedurally mainstreamed. Second, merger review can be more aggressive. Third, rules about
FRAND licensing can be clarified and implemented more predictably. This article analyzes these
proposals and makes other recommendation for improving antitrust scrutiny of markets.
start-ups, patents, mergers, licensing, FRAND
Dr. Litan makes a strong case for the decline in entrepreneurial activities in the United States despite
the recovery from the 2007 financial crisis. This comment examines the role of antitrust enforcement,
particularly in the high-technology sector, in shaping the entrepreneurial environment for startups.
Two areas are particularly salient for reforming antitrust enforcement: competition in platform
technologies and standard setting. I examine each in turn.
General purpose or platform technologies—such as electricity, computer operating systems, tele-
communications, and the Internet—have long played a critical role in enabling many other technol-
ogies, industries, and firms to build and grow their businesses. In this way, platform technologies
generate positive spillovers to the rest of the economy.
But these spillovers will not be maximized unless the platform is open to all comers, without
discrimination. When the platform is a natural monopoly (such as an electricity provider or, before
AT&T was broken up and mobile phones and cable television were viable competitors to telephones,
local telephone service), equal, nondiscriminatory access is ensured by regulation. In other contexts,
such as desktop operating systems, antitrust enforcement has been called upon to police a level playing
field, especially where the platform provider (for example, Microsoft’s operating system) also owns
applications or services (Microsoft’s Internet Explorer) that compete with independent providers. In
the current Internet retail economy, various platforms are or will be important hosts to startup activity,
and some have taken actions that have already attracted the attention of...

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