Creative destruction

How Antitrust Regulation Hinders Innovation and Competition

Few economic concepts elicit such strong reactions as that of monopoly, and the policy intended to address it—antitrust regulations (called competition policy in the European Union). Yet, both supporters and opponents of antitrust regulations agree on one fundamental point—that effective competition is vital to the American economy and the welfare of its citizens. However, they differ in how the law should encourage this. There are essentially three schools of thought regarding antitrust policy:

  1. Interventionist. Regulators should use the law proactively to break up companies that are abusing their market power and restore a competitive market. The size of a company is a good guide as to when this should be done.
  2. Consumer welfare. Abuse of market power is rare and dominant market positions can be achieved through delivering improvements in consumer welfare. Therefore, antitrust laws should be used not to break up companies that have grown big through successful competition, but to address instances of collusion, price fixing, or other anti-competitive behavior.
  3. Free market. Antitrust law is unnecessary. Market processes routinely undermine monopolies—and attempts to create monopolies. Laws against “unfair competition” prevent property owners from experimenting with joint ventures and other innovations that can improve consumer welfare.

Until recently, there was a sharp partisan divide between these schools, which can be roughly described as liberal, conservative, and libertarian, respectively. Traditionally in practice, this meant that antitrust conservatives would more often side with the libertarian camp, while leaving some room for cooperation with the liberal faction. However, the recent rise of “big tech” has led some conservatives to turn to the most interventionist approach with a zeal that threatens innovation in America’s world-leading technology industry.

The interventionist approach suffers from the same problems classical liberal economists have long identified with government interventions in markets.

First, there is the “knowledge problem”—how do regulators know better than the market what the best market structure is?

Then there are what are known as public choice considerations—regulators might exercise their powers to promote their own preferred policy positions. The very existence of those powers will lead to intense lobbying by regulated entities—both those seeking regulatory relief and those who benefit from entry barriers that limit competition from potential new entrants in a market.

The consumer welfare approach also has problems. Retaining antitrust law as an option that may be used against entrepreneurs carries the same threat to innovation posed by the interventionist approach. For instance, politicians with an animus against certain companies may pressure regulators into opposing mergers involving those companies. Regulators assessing unfair competition will not be immune from the knowledge problem and public choice effects. Entrepreneurs, eager to avoid provoking antitrust enforcement actions, will be dissuaded from pursuing innovations that might run afoul of the law.

The third approach, abolishing antitrust law, is extremely controversial. There is a widespread belief, among policy makers, the media, and the public, that without the threat of antitrust law, companies will disregard customer preferences, extract excessive profits, and kill off competitors. Yet there is no such thing as a dominant market position unless it is guaranteed by government. AOL, Borders, Blockbuster, Sears, Kodak, and many other firms once considered dominant in their markets have fallen as the result of competition, without any antitrust action.

This process of creative destruction, succinctly described by the economist Joseph Schumpeter, is a major driver of the kind of innovation that helps raise living standards. It will surely continue unless, ironically, antitrust regulators gain too much power. Were that to happen, large firms will be tempted to reach accommodations with a government that restricts their activities in exchange for not being broken up. Those accommodations will usually include protections and guarantees that act as entry barriers against potential innovative challengers. The result will be less competition, fewer innovations, and lower consumer welfare.

Creative destruction is the best answer to dominant market positions. Rather than use antitrust law aggressively, those who wish to see big companies fall quickly should instead work to end antitrust law. As for other barriers to creative destruction—for instance, financial regulations that make launching an initial public offering of stock prohibitively costly—increased competition can be achieved through deregulation in those other areas.


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“…a white swan in a pitch-black sea”

It has been engulfed by a massive corruption scandal in Brazil (2018), where it bribed officials in the state oil company Petrobras in order to secure contracts.

SBM ...a white swan in a pitch black sea Romano Pisciotti

SBM Offshore N.V. (IHC Caland N.V. prior to July 2005) is a Dutch-based global group of companies selling systems and services to the offshore oil and gas industry.

SBM Offshore has avoided criminal prosecution in the Netherlands by paying a record settlement of $240 million to the Dutch Public prosecutor ‘While in Brazil the Petrobras corruption affair — and SBM Offshore’s major role in it — is inexorably building to a climax, the temperature in Netherlands appears to have dropped after a record settlement was reached with the Dutch Public Prosecutor (OM) in November last year. The biggest corruption case in the Dutch history was bought off by SBM for a record $240 million in exchange for which no court case followed and no admission of guilt was entered. To the OM it was important the company had implemented major reforms to prevent re-offending. “We are now a white swan in a pitch-black sea,” said a relieved and proud SBM director Sietse Hepkema in an interview with leading Dutch newspaper NRC Handelsblad last December. The man hired to clean up the company said he didn’t expect further fines in Brazil. “I really think we paid our dues, “he said. And “I refuse to be Brazil’s smelly kid in the classroom.”‘ In order to be able to take part in Petrobras contracts in the future, SBM has also agreed to a R$1 billion settlement with the Brazilian government. Nevertheless, many of SBM’s executives still face criminal charges in Brazil.

SBM Offshore’s former CEO Tony Mace has been sentenced to three years in prison for his involvement in an international bribery conspiracy.

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The first extradition agreement in history (con versione in italiano)


Italian and English version The first extradition agreement in history (con versione in italiano) Romano Pisciotti

Ramses II”, who reigned for 67 years during the 19th dynasty of the 12th century BC, was known as “Ramses the Great”. His glories surpassed all other Pharaohs, and Egypt reached an overwhelming state of prosperity during his reign. Not only is he known as one of Egypt’s greatest warriors, but also as a peace-maker and for the monuments he left behind all over Egypt. He was the first king in history to sign a peace treaty with his enemies, the Hittites, ending long years of wars and hostility. The treaty can still be considered a conclusive model, even when applying todays standards.

Ramses II “, che regnò per 67 anni durante la XIX dinastia del XII secolo a.c., era noto come” Ramses il Grande “. Le sue glorie superarono quelle di tutti i Faraoni  e l’Egitto raggiunse uno stato di prosperità travolgente durante il suo regno; non solo è conosciuto come uno dei più grandi guerrieri dell’Egitto, ma anche come pacificatore e per i monumenti che ha lasciato in tutto l’Egitto. Fu il primo re della storia a firmare un trattato di pace con i suoi nemici, gli Ittiti, ponendo fine a lunghi anni di guerre e ostilità Il trattato può ancora essere considerato un modello conclusivo, anche quando si applicano gli standard odierni.
Ramset The first extradition agreement in history (con versione in italiano) Romano Pisciotti

The treaty was composed of 18 articles. After a long introduction recording the kings titles and referring to establishment of good fraternity and peace, one article was included to exclude any further attacks on the other countrys territories:

“Reamasesa, the great king, the king of the country of Egypt, shall never attack the country of Hatti to take possession of a part (of this country). And Hattusili, the great king, the king of the country of Hatti, shall never attack the country of Egypt to take possession of a part (of that country). “

Il trattato era composto da 18 articoli. Dopo una lunga introduzione che registra i titoli dei re e fa riferimento alla creazione di una buona fraternità e pace, è stato incluso un articolo per escludere ulteriori attacchi ai territori degli altri paesi:

“Reamasesa, il grande re, il re del paese d’Egitto, non attaccherà mai il paese di Hatti per prendere possesso di una parte (di questo paese). E Hattusili, il grande re, il re del paese di Hatti, dovrà non attaccare mai il paese d’Egitto per impossessarsi di una parte (di quel paese) “.

pietr The first extradition agreement in history (con versione in italiano) Romano Pisciotti

The treaty then included three articles establishing mutual collaboration against any internal mutiny or coups in either country.

Il trattato includeva quindi tre articoli che stabilivano la collaborazione reciproca contro qualsiasi ammutinamento interno o colpi di stato in entrambi i paesi.

To avoid any further dispute, if a refugee flees to the other country, ten articles were dedicated to their extradition. This was the first extradition agreement in history between two nations. The treaty did not exclude any person, and regardless of whether they were “great men”, nobles or “unknown persons”

Per evitare ulteriori controversie, se un rifugiato dovesse fuggire nell’altro Paese, dieci articoli sono stati dedicati alla loro estradizione. Questo è stato il primo accordo di estradizione nella storia tra due nazioni. Il trattato non escludeva alcuna persona, indipendentemente dal fatto che fossero “grandi uomini”, nobili o “persone sconosciute”

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Romano Pisciotti copia The first extradition agreement in history (con versione in italiano) Romano Pisciotti
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Ricchezza senza freni

Jeff Bezos: primo a superare la soglia dei 200 miliardi

La ricchezza fondatore di Amazon, già l’uomo più ricco del mondo dal 2017, continua a segnare nuovi record, grazie all’aumento vertiginoso del valore delle azioni del colosso dell’ecommerce (+25% negli ultimi tre mesi, +86% da inizio anno).

Risultato finale. La ricchezza del CEO di Amazon ha sfondato il tetto del 200 miliardi di dollari, impresa in cui nessuno era riuscito prima. Per la precisione, secondo l’indice Bloomberg Billionaires, mercoledì scorso la ricchezza personale di Bezos valeva circa $ 202 miliardi.

“Per anni col suo negozio di materiale elettrico ha avuto benessere per se e per la famiglia. Pagava tasse salate e l’affitto, lo stipendio a due dipendenti e tutto correva normalmente, ma poi è intervenuta la distribuzione via internet. “Ordini, ti portano a casa il materiale e paghi meno di quanto pago io al grossista lo stesso pezzo”.

Ormai quel negozio è l’ombra di se stesso, niente più dipendenti, pochissimi clienti, lavora per pagare l’affitto e le tasse. Perchè tiene ancora aperto ? Mi dice …Ho passato gli anni belli della mia vita qui dentro e chiudere mi sembra morire. L’orgoglio di un piccolo imprenditore contro Amazon e simili che giocano a chi ne fa chiudere di più fino a radere al suolo il commercio al dettaglio. Però, quando avranno tutto in mano, potranno decidere anche di alzare i prezzi perchè non servirà più la micidiale concorrenza sleale contro i piccoli.”

Giulio Rossi Valdisole

…la ricchezza del CEO di Facebook (FB), Mark Zuckerberg ha superato i 100 miliardi di dollari.

Il CEO di Tesla (TSLA) Elon Musk, con un patrimonio netto di $ 96 miliardi ( a dispetto del colossale indebitamento delle sue aziende), è vicino a eguagliare la ricchezza di Zuckerberg. Il fondatore di Microsoft (MSFT) Bill Gates lo ha già fatto (124,3 miliardi).

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Nulla di nuovo, bolle speculative

Alessandro Barbero è un ottimo divulgatore, il video riporta una lezione del professore sulla rivoluzione francese….guardate il video e divertitevi (…o meditate) a trovare tutti i parallelismi con la situazione italiana. ( stati generali, tassa patrimoniale, debiti dello Stato, stato d’emergenza e potere assoluto, situazione finanziaria, limitazione del contante, banca centrale, valuta, azioni bancarie, bolle finanziarie, speculazione, banchieri e finanzieri, ecc…)

Romano Pisciotti


Mentre il Governo dichiara guerra al “sommerso” ( parte integrante dell’economia del paese) rischiando di deprimere ulteriormente l’economia pur di accaparrarsi un maggior gettito fiscale (…già tra i più alti in Europa), non batte ciglio per l’evasione legalizzata che s’immerge come un sottomarino nelle acque del, di fatto, paradiso fiscale olandese:

camp 2 AZIENDE...CHE FUGGONO Romano Pisciotti

Campari non è l’unico ad aver fatto questa scelta e non sarà neppure l’ultimo:

Fiat (FCA) ha portato la sede fiscale in Olanda dal 2014, seguita da MediaForEurope, la nuova holding che ha unito Mediaset italiana e spagnola. Ecco altri che si sono spostati nei Paesi Bassi: Cementir, del gruppo Caltagirone, Eni, Enel, Exor, Ferrero, Prysmian, Saipem, Telecom Italia, Illy, Luxottica Group. 

In Europa non si hanno le idee chiare sulla concorrenza sleale!!!

Romano Pisciotti

Legal competition experts

Italian and English version Legal competition experts Romano Pisciotti

Prof. Avv. Davide Maresca is currently managing partner of the Maresca & Partners law firm in Brussels and Genoa, where he has gained specific experience in the field of state aid, competition and regulation of transport infrastructures.

Il Prof. Avv. Davide Maresca è attualmente managing partner dello studio legale Maresca&Partners a Bruxelles e Genova, dove ha maturato specifica esperienza in materia di aiuti di stato, concorrenza e regolazione delle infrastrutture di trasporto.

The Firm has always paid a great deal of attention to the discipline dictated by the European Union in the matters of liberalization of services, privatizations, transport, labor, the environment, consumers, competition and, in general, the internal implementation of the most important Community policies.

Particularly important is the activity performed before the European Commission and the European Courts (Court of Justice and Court of First Instance) as well as the corporate consultancy activity regarding conduct compliant with EU regulations. The Firm constantly follows the procedures it is invested with before the institutions of the European Union using a dedicated structure in Brussels.

The firm boasts a consolidated experience in competition matters both internally and at community level. The activity was concentrated in the treatment of numerous cases of abuse of a dominant position, agreements / cartels and concentrations. On many occasions our lawyers have dealt with liberalized economic sectors as well as the IT sector (in particular the production, trade and use of software) and infrastructures.

Particular relevance is represented by the state aid and internal market activity, with reference to the free movement of services, goods and capital, as well as the award of public contracts and concessions.

In assisting M&A and privatization operations, in addition to the corporate aspects, the Firm pays particular attention to the prevention and resolution of situations actually or potentially distorting competition.

Schermata 2020 06 03 alle 09.57.02 Legal competition experts Romano Pisciotti

Lo Studio dedica da sempre moltissima attenzione alla disciplina dettata dall’Unione europea nelle materie della liberalizzazione dei servizi, delle privatizzazioni, del trasporto, del lavoro, dell’ambiente, dei consumatori, della concorrenza e, in generale, dell’attuazione interna delle più importanti politiche comunitarie.

Particolare rilevanza ha l’attività prestata davanti alla Commissione europea e alle Corti europee (Corte di giustizia e Tribunale di primo grado) nonchè l’attività di consulenza societaria in ordine ai comportamenti conformi alla disciplina comunitaria. Lo Studiosegue costantemente le procedure di cui è investito davanti alle istituzioni dell’Unione europea avvalendosi si una struttura dedicata a Bruxelles.

Lo Studio vanta una consolidata esperienza nella materia della concorrenza tanto a livello interno quanto a livello comunitario. L’attività si è concentrata nella trattazione di numerosi casi di abuso di posizione dominante, intese/cartelli e concentrazioni. In molte occasioni i nostri avvocati si sono occupati di settori economici oggetto di liberalizzazione nonchè del settore dell’informatica (in particolare della produzione, commercio e utilizzazione di software) e delle infrastrutture.

Particolare rilevanza è rappresentata dall’attività in materia di aiuti di stato e mercato interno, con  riferimento alla libera circolazione dei servizi, delle merci e dei capitali nonché all’aggiudicazione degli appalti pubblici e delle concessioni.

Nell’assistenza ad operazioni di M&A e di privatizzazioni, oltre agli aspetti societari, lo Studio dedica particolare attenzione alla prevenzione ed alla risoluzione di situazioni effettivamente o potenzialmente distorsive della concorrenza.


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Antitrust law and antitrust compliance

Rechtsanwalt Dr. Rübenstahl has worked as a defense lawyer and in an advisory capacity in the areas of white collar crimes, criminal law and criminal tax law for over fifteen years. He began his career at a law firm which specialized in appeals of criminal cases at the Federal Court of Justice’s seat in Karlsruhe. He has also worked in large international law firms in Frankfurt, with an increasing focus on the areas of compliance and internal investigations. Between 2015 and 2017, he was a successful attorney and founding partner of a renowned boutique criminal-law firm specializing nationwide in medical, white collar, and criminal tax-law with offices in Cologne, Frankfurt am Main, and Berlin before founding the law office of Rübenstahl and Associates in 2018.

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Rechtsanwalt Dr. Markus Rübenstahl, Mag. iur., is Co-Editor of the first edition of the book “Kartell Compliance | Prävention – Investigation – Corporate Defense – Remediation” and author of the chapter „Strafbare Submissionsabsprachen und (Submissions-)Betrug“. The handbook covers the topic of civil and criminal offences, antitrust law and antitrust compliance comprehensively. In the book you will also find chapters on antitrust compliance requirements in CH, A, F, I, E, USA, China, Russia and Brazil.

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“Market” is any area within which the meeting between supply and demand for goods and services takes place and the exchange of them through the price mechanism, determined precisely by this meeting: operators decide independently and individually their behavior, in particular, the prices and quantities of sales and purchases, such that the overall market performance, in terms of global prices and quantities, is the result of the countless decentralized decisions taken by the actors operating there and their interactions. The term “competition” can have two meanings and both presuppose the notion of market set out: one of them refers to the conduct of companies, the other to a particular structural conformation of the market. The first meaning is that which recalls rivalry, competition and struggle between companies, which implement independent behavior in order to increase their position on the market, to the detriment of rivals. The second, however, consists of the situation characterized by a large number of operators on the market, each of which offers such a small share of the same product or service that it is not able to individually influence the price level following a change in the quantity offered.

For the polysemy of the term “market” see, in particular, M.R. FERRARESE, Law and market, Turin, 1992, p. 17 ss., Which sorts the variety of meanings into four categories: a) market as place; b) market as ideology; c) market as a paradigm of social action; d) market as an institution.

Summarizes the characteristics of the market economy model: a) free market of production factors (raw materials, capital and labor); b) freedom of private economic initiative; c) organization of the private enterprise according to the principle of capital sovereignty; d) free play of competition; e) consumer sovereignty.


Romano Pisciotti browsing the web….about antitrust

POSTE ITALIANE sotto la lente dell’Antitrust

Le raccomandate non consegnate

L’operazione è partita dopo l’avvio dell’istruttoria “per accertare una presunta pratica commerciale scorretta, posta in essere nell’ambito del servizio di recapito della corrispondenza e, in particolare, delle raccomandate”.

Romano Pisciotti: Ho accertato personalmente questa pratica scorretta, la Magistratura dovrebbe intervenire direttamente, non solo l’antitrust.