Brother, may I?: the challenge of competitor control over market entry
Those concerned with restrictions on innovative technologies and business models often decry the stultifying effects of a ‘Mother, May I?’ approach, whereby the innovator needs government permission to enter a market. These are worthy concerns that regulators ought to take seriously. This article focuses on a related issue, which the authors call the ‘Brother, May I?’ problem or the challenge of competitor control over market entry. This problem arises when would-be entrants are effectively required to obtain permission from incumbent competitors to enter or expand within a particular market. Whether it is due to a law or regulation, the decision of a financially-interested state board, or conduct by a monopolist looking to maintain its market power, new entrants to a market generally should not have to get their competitors’ permission to compete. That such permission is effectively required in an increasing number of situations is inconsistent with the free-market principles that ought to guide our economic policies. Three recent appellate victories by the Federal Trade Commission—in North Carolina Dental, Phoebe Putney, and McWane—all in some way involved the need to seek the permission of competitors to enter a market, and this article addresses each case in turn.
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