When the State Protects the Market from Itself
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.” Adam Smith wrote those words in 1776, and nearly two hundred and fifty years later competition law remains locked in combat with a problem that the Scottish philosopher considered, essentially, unsolvable. The conspiracy, it turns out, is perennial.
The Freedom to Compete—or Freedom from Competition?
There is a paradox at the heart of antitrust law, and it is not a subtle one: to protect the free market, you must constrain the freedom of its participants. Robert Bork, the conservative jurist whose “Antitrust Paradox” landed like a grenade in legal circles when it appeared, in 1978, argued that poorly constructed competition law can inflict more damage than the monopoly it was designed to prevent—stifling innovation and shielding inefficient players from the consequences of their own mediocrity. The road to market distortion, Bork suggested, is paved with regulatory good intentions.
For the entrepreneur, this means navigating terrain where every market success can be construed as evidence of dominance abuse. Win too decisively, and someone in a government office will want to know how you did it.
What Competition Law Forbids—and Why Every Business Owner Should Care
Contemporary antitrust legislation—whether European (Articles 101 and 102 of the Treaty on the Functioning of the European Union), American (the Sherman Act, now more than a century old), or Polish—rests on three prohibitions: agreements that restrict competition, abuse of dominant position, and merger control where such combinations might weaken competitive dynamics. The language varies; the logic does not.
In practice, this means a casual conversation with a competitor about pricing can cost millions in fines. It means refusing to coöperate with a smaller player—if you happen to control what regulators call an “essential facility”—can be deemed abuse. It means acquiring another company requires approval from a bureaucrat empowered to assess whether your success might harm something called “effective competition.” The phrase has a certain Orwellian ring to it.
For Entrepreneurs: Shield and Sword
A law firm operating in the competition-law arena offers services of a dual nature. There is the shield: antitrust compliance audits, management training, review of distribution agreements and pricing policies, representation before competition authorities, defense against cartel allegations. And there is the sword: reporting competitors’ violations, pursuing damages for cartel injuries, deploying leniency programs as instruments of corporate strategy.
One point deserves particular emphasis for companies with international operations: competition law has extraterritorial reach. A conspiracy hatched in Singapore can face sanctions in Brussels if its effects touch the European market. Borders, in this arena, are porous.
Merger Control: When Success Requires Permission
Every acquisition exceeding certain turnover thresholds requires notification to the relevant authority—in Poland, the Office of Competition and Consumer Protection; in the European Union, the European Commission; in America, the apparatus established by the Hart-Scott-Rodino Act. The entrepreneur planning a deal must account for the duration of proceedings (weeks to months, sometimes longer), the risk of conditions being imposed (sell off these assets, license that technology to your rivals), and the possibility that the transaction will simply be blocked. Approval is not guaranteed. It is, in fact, a negotiation.
The Libertarian View: A Cure Worse Than the Disease?
Milton Friedman maintained that the only legitimate rôle for government with respect to monopolies is to refrain from creating them in the first place. History has partially vindicated him: most durable monopolies have arisen not from market superiority but from state-granted privileges—licenses, tariffs, regulations that happen to favor incumbents.
The Chicago School, whose intellectual leaders included Bork and the polymath jurist Richard Posner, revolutionized antitrust thinking by introducing the consumer-welfare standard as the sole criterion for judgment. If a practice lowers prices or improves quality, it should not be prohibited—even if it drives weaker competitors out of business. Efficiency, in this view, is its own justification.
Yet even the most ardent skeptics of government intervention will concede a practical point: once competition law exists, entrepreneurs must reckon with it. Ignorance of the law excuses no one—particularly when penalties can reach ten per cent of global turnover.
The Arithmetic of Success
For the entrepreneur, competition law is not an academic abstraction but a daily calculus. Every distribution agreement, every understanding with a competitor, every pricing strategy, every acquisition requires analysis for antitrust compliance. The rules are intricate, the stakes considerable.
And here is the final paradox: the greater your market success, the greater your regulatory exposure. As one American lawyer reportedly observed, “First they ignore you, then they laugh at you, then they fight you—and then the Justice Department shows up.”
A competent law firm can help you navigate each of these stages. The wise entrepreneur, however, engages counsel before the regulators come knocking.
Skarbiec Law Firm provides comprehensive competition-law advisory services: antitrust audits, representation before the Polish Office of Competition and Consumer Protection and the European Commission, M&A due diligence, compliance programs, and executive training.
