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Academic Articles Awards > General Antitrust

Brother, may I?: the challenge of competitor control over market entry

Maureen K. Ohlhausen and Gregory P. Luib, Journal of Antitrust Enforcement, forthcoming 2016; 2015 Global Antitrust Economics - Conference Proceedings, Concurrences, forthcoming 2016

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Those concerned with restrictions on innovative technologies and business models often decry the stultifying effects of a ‘Mother, May I?’ approach, whereby the innovator needs government permission to enter a market. These are worthy concerns that regulators ought to take seriously. This article focuses on a related issue, which the authors call the ‘Brother, May I?’ problem or the challenge of competitor control over market entry. This problem arises when would-be entrants are effectively required to obtain permission from incumbent competitors to enter or expand within a particular market. Whether it is due to a law or regulation, the decision of a financially-interested state board, or conduct by a monopolist looking to maintain its market power, new entrants to a market generally should not have to get their competitors’ permission to compete. That such permission is effectively required in an increasing number of situations is inconsistent with the free-market principles that ought to guide our economic policies. Three recent appellate victories by the Federal Trade Commission — in North Carolina Dental, Phoebe Putney, and McWane—all in some way involved the need to seek the permission of competitors to enter a market, and this article addresses each case in turn.

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