Dynamic Competition As a Double-Edged Sword: A Primer on Antitrust

July 10, 2024


Dynamically evaluating competition requires integrating a time dimension into antitrust analysis. This dimension of time influences the antitrust analysis in two fundamentally opposing ways.

On the one hand, considering competitive dynamics justifies the current and future market imperfections. In this Schumpeterian vein, antitrust should embrace the imperfections of certain contractual market exchanges that are justified to stimulate innovative endeavors dynamically, just as the protection of intellectual property rights generates market imperfections to promote dynamic competition. Nevertheless, this dynamic competition-as-antitrust defense proves to be an incomplete account of the richness of the concept of dynamic competition.

Dynamic competition, most recently and influentially, has been resorted to as an antitrust offense: Companies may target companies that appear to be non-competitors at present, but who are likely to develop into credible rivals to incumbents. Preserving dynamic competition entails safeguarding future competitive constraints that nascent or potential competitors may exert. In this structuralist vein, antitrust law should recognize dynamic competition as a defense against corporations that suppress potential and emerging competitors.

This article provides a primer on the concept of dynamic competition as a double-edged sword in antitrust analysis. It conceptualizes the origins and conditions of dynamic competition-as-defense and dynamic competition-as-offense arguments. The article concludes with a discussion of the administrability of the dual nature of the concept of dynamic competition for antitrust enforcers, which we articulated.