Oregon Law Review : Vol. 89, No. 3, p.785-810 : Standardization and Markets: Just Exactly Who Is the Government, and Why Should Antitrust Care?
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My assignment at the symposium at which this Article was presented was to relate private standard setting to the symposium theme: the “public and the private,” and the possibility that whatever “boundaries” they may have are in “transition.” This Article is basically a sociological exercise. It will make two basic arguments about how the role of standard setting in our economy is at odds with the commonly assumed dichotomy between bureaucracy and markets. First, I stress the great ubiquity and influence of standard-setting activity in the United States. A large proportion of the standards we adopt have more or less binding force, and they exert influence far beyond high technology and manufacturing. They are everywhere. Moreover, most matters governed by standards are not subject to any government oversight. They are formulated outside the government purview, and they get their influence not from the formal force of law but from independent forces. And yet, as I argue, those standards cannot easily be explained as merely the results of market-driven influences. That is to say, even though most standards are formulated outside any government purview––and, therefore, under the bureaucracy-markets dichotomy, should be explainable in some way as the product of competitive markets––they are in fact not subject to price-competitive pressures. In the discussion below, I relate this phenomenon to theoretical developments in the social sciences concerning “isomorphism” or “institutionalism” in markets. Second, the nature of standards activities also tends to suggest that much of the social decision making that occurs outside of markets is not actually overseen by government––contrary to the impression given by the bureaucracy-markets dichotomy. This second issue is the flip side of the first. The ubiquity of SSOs not only casts some doubt on the prominence of markets as resource allocators but also casts some doubt on government as markets’ chief alternative.