GAI Response to the United States Department of Justice(“DOJ”) Antitrust Division’s Public Roundtable on Anticompetitive Regulations
Price regulation and antitrust are alternative mechanisms to control market forces in the presence of market failure.2 As the Division accurately points out in its description of this Roundtable, regulation accompanied by centralized decision making supplants competitive market processes and threatens to harm competition.3 Or, as Judge Frank H. Easterbrook succinctly states it: “Regulation displaces competition.”4 The determination of prices through the dynamic interaction of supply and demand is a fundamental characteristic of well-functioning markets. Prices serve a critical signaling function in market economies, allowing market participants to adjust their behavior in response to the relative values of goods being bought or sold.5 Government control over prices is inherently less efficient in responding to ever-changing conditions compared to the ordinary market forces that exist in competitive markets. Regulatory schemes “require centralized decisions instead of a free market process” and “set static rules devoid of the dynamic realities of the market.”6
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