Antitrust - What Role For Strategic Management Expertise? A Conference in Honor Of Joseph Brodley

Panel II: Topics In Antitrust To Which Professor Brodley Contributed

90 B.U.L. Rev. 1457 (August, 2010)

by Felix Oberholzer-Gee & Dennis A. Yao

Excerpt

Introduction
 
The purpose of antitrust law is to promote competition and protect consumers from anticompetitive business practices. Enforcing antitrust rules thus requires an understanding of what constitutes an anticompetitive business practice; an understanding influenced by both legal precedent and broader knowledge of markets, companies, and competition. This Essay traces the influence of two academic fields - economics and strategic management - on antitrust law. Both fields are natural candidates to influence courts, government competition authorities, and legal scholars, but, as we will document, strategic management appears to have had little influence to date.

We begin with a brief description of strategic management and the field's most important ideas in Part I. We then compare these ideas to work done in economics (Part II) and ask what strategic management might contribute to our thinking about antitrust issues (Part III). In Part IV, we present evidence on the influence of both economics and strategy on court decisions and legal scholarly writing. We conclude in Part V with some conjectures on why strategy has had only limited influence in matters of antitrust.

I. What Is Strategy?
 
A company's strategy is an overarching plan that specifies in which markets the firm will operate and how it will compete. Strategic plans are typically formulated relative to the performance metrics of other companies competing in the same markets. For example, a company pursuing a strategy of cost leadership strives to achieve lower unit costs than its rivals. [footnotes omitted]

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