Competition Law and Economic Inequality: A Comparative Analysis of the US Model of Law

Abstract

To what extent does the choice of competition law model correlate with economic inequality? While competition laws have been suggested as potentially contributing to current inequality trends in developed countries and as a viable instrument to address them, there is little empirical evidence on their distributional effects. This article helps fill this gap. It utilizes a comparative legal approach and a unique estimation framework based on the textual similarity to estimate the differences between the US and EU models and provides evidence that countries that adopt a US-style antitrust model are more likely to exhibit higher income inequality levels over time. While this link should not be interpreted causally, it suggests that potential institutional factors might affect the rise of inequality.

Legal Foundations of Economic Inequality in the Time Loop of Law and Economics Movement

“…The present antitrust framework hand-picks explicit legal rules over others and uses them to define the market. Competition law organises coordination through conventional capitalist firms, the space devoid of equality and democratic decision-making, exacerbated since the resuscitation of law and economics, preferring concentrated wealth ownership, intensifying inequality (Zac, 2022). We are in the age of the consequences of policies made by the law-andeconomics movement, where large firms coordinate and law thumbs-down cooperation by smaller firms.…”