First, competition law should be rooted in sound economics. Its objective should be to prevent private arrangements that interfere with the effective functioning of the market. It should be based on rigorous analysis that distinguishes between efficient rivalry and anticompetitive conduct. And it should be concerned with protecting competition, not individual competitors. Second, sound competition policy needs to be able to evolve over time and to adapt to differing and changing circumstances.
Competitive markets facilitate entrepreneurship, innovation and economic progress.
And they, in turn, pose new challenges for competition policy. In the 1960's, for example, antitrusters thought that resale restrictions imposed by a manufacturer on its distributors were almost always bad, and the U.S. Supreme Court ruled in 1967 that such restrictions constituted a per se violation of our antitrust laws. Ten years later, after a great deal of study and debate by economists and lawyers, the Supreme Court reversed itself. In other areas, too, antitrust doctrine and the economic underpinnings of antitrust have evolved over time. Sound competition policy must be flexible enough to change in response to new challenges and new learning about sound economic analysis.