Pre-distribution versus re-distribution: why competition law is much more than a tool to alleviate poverty

Economic inequality levels have been increasing in many parts of the world, causing political and social instability, yet tax systems fail to keep up with the current trends. In this chapter we explore the unique characteristics of competition law as a pre-distribution tool. By emphasizing the theoretical and practical features of the law, we make the case that competition law is a well-suited instrument to help constrain economic inequality. We emphasize the effects of market power on the low and middle classes, who witnessed their standard of living stagnate or decline in recent decades. The low and middle classes play an enormous role in a healthy economy, sustaining consumption, investment in education, health, and housing; they also play a key role in supporting social protection for extremely low-income groups through their tax contributions. Limiting economic inequality is an important policy goal that provides economic benefit much greater than poverty reduction for the developed world, a goal that should be considered under the umbrella of sustainable growth and competition policy.