Economic Foundations of Competition Laws: The Benefits of Monopoly vs. The Benefits of Competition

By: Alfonso Miranda Londoño & Juan D. Gutiérrez-Rodríguez

Antitrust law can be described as the set of legal rules that regulate the current or potential power of the companies on a certain market, on behalf of public interest. In practice, antitrust law prohibits the execution of restrictive competition practices, the acquisition of a dominant position in the market through the accomplishment of these practices and the abuse of the dominant position.

This document is an approach to the analysis of one of the fundamental premises of this discipline, which states that the markets in competition produce greater benefits to society than the markets with monopolistic structures. In this order, we will analyze the origins, evolution and purpose of the Antitrust Law, the practical difficulties that the competition authorities must face particularly the Latin American authorities, and also the criticisms that have been formulated against the laws that develop Antitrust. For this is purpose the following subjects are exposed: 1) Origins and evolution of the Antitrust Law in the United States of America, the European Union, Latin America and the Caribbean. 2) Economic Aspects of the Antitrust Law. 3) Competitive markets and monopolistic markets. 4) Criticisms to the Antitrust Law. 5) The challenges for the Latin American competition authorities.