Document Type

Article

Publication Date

10-2024

Abstract

A coming wave of general-purpose technologies, including artificial intelligence ("AI"), robotics, quantum computing, synthetic biology, energy expansion, and nanotechnology, is likely to fundamentally reshape the economy and erode the assumptions on which the antitrust order is predicated. First, AI-driven systems will vastly improve firms' ability to detect (and even program) consumer preferences without the benefit of price signals, which will undermine the traditional information-producing benefit of competitive markets. Similarly, these systems will be able to determine comparative producer efficiency without relying on competitive signals. Second, AI systems will invert the salient characteristics of human managers, whose intentions are opaque but actions discernible. An Al's "intentions" -its programmed objective functions-are easily discernible, but its actions or processing steps are a black box. Third, the near-infinite scalability of the technologies in the coming wave will likely result in extreme market concentration, with a few megafirms dominating. Finally, AI and related productive systems will be able to avoid traditional prohibitions on both collusion and exclusion, with the consequence that antitrust law's core prohibitions will become ineffective. The cumulative effect of these tendencies of the coming wave likely will be to retire the economic order based on mandated competition. As in past cases of natural monopoly, some form of regulation will probably replace antitrust, but the forms of regulation are likely to look quite different. Rather than attempting to set a regulated firm's prices by determining its costs and revenues, the regulatory future is more likely to involve direct regulation of an Al's objective functions, for example by directing the AI to maximize social welfare and allocate the surplus created among different stakeholders of the firm.

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Copyright 2024 New York University Law Review. Reproduced with permission.

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