Social Capture of US and EU Competition Policy: A Lesson from the Global Financial Crisis

Against the background of growing discontent over excessive leniency of US and EU competition policy, this article argues that the policy displays characteristics corresponding to those that brought about the social capture of financial policy co-responsible for the late 2000s global crisis. The prevailingly anti-interventionist worldview of competition practitioners working as industry representatives threatens to disproportionately affect the mindset of competition officials through three channels of social influence concerning self-identification, social status, and interpersonal relationships. Regardless of whether these channels have been actively shaped by the industry, their existence poses a risk that competition policy might be designed and enforced in a way that furthers industry interests to the detriment of consumers and small businesses, which risk might have already materialised in the excessive leniency of the policy. The article also discusses measures to prevent social capture such as promotion of diversity and reduction of revolving door, cautioning nevertheless that difficult trade-offs may need to be made in their implementation.