The New Competition School is a multi-disciplinary group of experts seeking to reclaim powerful “missing tools” to tackle excessive and growing concentrations of private corporate power, and the economic, political, geo-political and societal harms that flow from it.
With better tools, market regulators can more easily ‘see’ and understand corporate power, and craft serious action to tackle the dangers.
We seek to challenge and change prevailing orthodoxies, especially in the field of competition policy and market regulation, where there is a crisis in policy and a near-collapse in enforcement. These crises are political, but they also require a rethink at the methodological and technical levels, which is where we will contribute.
We address Industrial Organisation (IO) Economics
In particular, we target an academic micro-economic discipline called Industrial Organisation (IO) economics, a key component of the neoclassical economics paradigm and of the Chicago-School Law and Economics movement.
IO has become especially dominant in the area of antitrust / competition policy and enforcement. It is an essentially unregulated field that deals in theories and abstractions.
IO economics focuses on the interaction of supply and demand, often based on assumptions on the shape of demand and supply curves and marginal reasoning, with little empirical data used.
Neither companies nor their analysts use IO to analyse their businesses or markets or behaviour. However, in the hands of a dominant and well-resourced competition “priesthood”, including powerful but little-known IO consultancies, the discipline has proved ideal for massaging assumptions and inputs to misrepresent or obscure market realities and corporate behaviour, and to create desired conclusions: that ‘this merger is not problematic,’ for example, or ‘that abuse can be overlooked.’
IO is used to throw smoke in regulators’ eyes, “spam” them with complexity, and create “economics obstacle courses” to block regulatory action on monopolising mergers, abuses of dominance, cartels, or excess pricing. It is central to what a top U.S. enforcer, Jonathan Kanter, recently called a “crisis of expertise.”
The use of IO in the competition field grew prominent in the United States from the 1970s and came to Europe in a “Big Bang” of reforms in a “more economic approach” in 2004. This brought a heightened focus on narrowly-defined economic “efficiency,” displacing concerns about power and market structure, and leading to a dramatic weakening in enforcement and rising corporate concentration.
Our approach and our alternatives
As we develop our critiques of IO we will also seek to build alternatives: reclaiming existing tools and developing new ones, notably to bring back power and market structure into the equation.
We will build alternatives that rest on well-grounded market realities, not academic abstractions. We will build these from the bottom up, generating robust, well researched white papers, briefs, explanatory articles and other empirical materials, in partnership with a growing NCS community of academics, civil society actors, ex IO economists, journalists and others.
Our main early focus will be to develop the use of Accounting and Financial Analysis (AFA) in the competition field. This is the world of standard company reports, balance sheets, cash flow and income statements, containing standardised, legally required and audited data that is tried and tested, rooted in the real business world, and far less susceptible to manipulation. We have worked with partners to create some initial pointers for use cases of AFA, here.
Our project has an international perspective, but our main focus for now is Europe. We take interest in different market sectors, but with a special focus on big tech.
We do not take corporate funding.
New Competition School 