Book Review: Blockchain + Antitrust: The Decentralization Formula

In Blockchain + Antitrust, Thibault Schrepel deftly weaves technological and legal threads to advance an uniquely rich anatomisation of the complex and evolving relationship between blockchain and antitrust. Commendably approachable for readers who may be unfamiliar with blockchain technology or, indeed, US antitrust and EU competition law, each Chapter represents a clear, logical building block and critical analysis is delivered in Schrepel’s characteristically jaunty style.

Part 1 seeks to establish ‘A Common Ambition’ and is divided into five distinct Chapters, the first of which presents an informative account of how and why blockchain came into being. Whilst the emergence of the cypherpunks and the publication of Satoshi Nakamoto’s fabled Bitcoin white paper are likely to be familiar history, the journey concludes with a less widely-known instance of crisis management that raises exigent questions concerning the existence and exercise of power on the blockchain. Diving into the technology, Chapter 2 identifies commonalities between blockchains, namely encryption and immutability, and elucidates how blockchains exhibit key technical differences at the level of governance and compete organically through a process of combination. Exploring the dynamics of blockchain competition, Chapter 3 puts Charles Darwin’s The Origin of the Species to use in explaining how competition occurs first between blockchain’s applications (varieties of the same species) and then between blockchain and non-blockchain applications (different species). Importantly, this Chapter clearly describes the development of monocentric blockchains, which permit a single application, and platform blockchains, upon which an unlimited number of applications may be layered, and illustrates how the latter pose an increasingly formidable threat to the platforms of Big Tech. Turning attention to decentralisation, which is taken to mean “the autonomy enjoyed by a given subject in defining its own competence”, Chapter 4 offers up a satisfying interrogation of the multiple layers comprising blockchain ecosystems and the interactions between them. Contrary to convention, decentralisation on the blockchain drives efficiency and is the key to its Darwinian survival. Chapter 5 evaluates complementarities and tensions between blockchain and antirust and lays down Schrepel’s analytical foundation stone that the two share the same fundamental objective of decentralising processes as opposed to outcomes. 

The book proceeds in Part 2 to confront so-called ‘mutual aggressions’ between technology and law by examining how blockchain can facilitate anticompetitive practices which give rise to centralisation. Chapter 6 amply demonstrates the inapplicability of Ronald Coase’s theory of the firm to blockchain. Against this backdrop, in Chapter 7 Schrepel dissects blockchain governance, analysing the blockchain power game through the lens of Lawrence Lessig’s four modalities, and articulates a novel ‘theory of granularity’ which advances the recognition of a new legal fiction in the form of the ‘blockchain nucleus’. For scholars of antitrust, much of the proverbial meat of Blockchain + Antitrust can be found in Chapters 8 to 12, which address collusion on and using blockchain, the issues of market definition and market power and how to analyse blockchain monopolisation and concentration. Blockchain is poetically described as “the rainforest of tomorrow’s collusive agreements: full of original life forms and alternative possibilities”. Insights abound and the assessment is informed by the critical distinction between public and private blockchains. Ultimately, it is envisaged that antitrust should act to maintain decentralisation in the face of collusion and focus, at least in the immediate term, on addressing anticompetitive practices using blockchain rather than practices related to blockchain itself with the aim of preserving its design. The discussion of merger control underscores the pressing need for a collaborative approach and paves the way to Part 3, which elaborates the proposed ‘law + technology’ formula. Whereas Chapter 13 is purely theoretical in nature, Chapter 14 addresses myriad practical challenges. Schrepel’s recommendations for the creation of innovation hubs, sandboxes and safe harbours that encourage harmony between technologists and lawyers may be unsurprising. The proposed implementation of ‘futarchic governance’ as the ideal decentralised decision-making mechanism is likely to be controversial. Finally, Chapter 15 highlights the dangers associated with pursuing blockchain interoperability and gazes ambitiously to the future.

Although replete with innovative thinking and attention to technical detail, Blockchain + Antitrust is not without shortcomings. Considerable words are devoted in Chapter 5 to an exploration of competing perspectives on the objectives of US antitrust; yet precious few are afforded to EU competition law. This comparative paucity of analysis amounts to a missed opportunity. As a point of positive law it is excessive shorthand to boil EU jurisprudence down to a single extract from the CJEU’s judgment in Post Danmark I. Normatively, the book’s failure to critically engage with consequentialist and deontological approaches to EU competition law represents a fundamental lacuna. In addition, it is remarkable that in conceptualising the ‘blockchain nucleus’ as a legal fiction, Schrepel draws upon Christopher Stone’s seminal work, Should Trees Have Standing?, yet leaves the cardinal title question forsaken. Indeed, it seems unconscionable not to draw attention to the stark reality that the Ethereum blockchain, to which the book habitually refers, depends upon a proof-of-work consensus that “currently consumes the energy equivalent of a medium-sized country” (Ethereum Foundation Blog, 18/05/2021). Claims that a transition to proof-of-stake will yield significant reduction in environmental impact without compromising integrity must be proven. For all the ills that blockchain vows to address, its methods risk contributing significantly to the greatest threat facing humanity: the environmental crisis. This reader would posit that at the heart of a ‘law + technology’ approach should be a commitment to unrelenting legal intervention to protect the environment against technology-first solutions. 

Blockchain + Antitrust is essential and timely reading. The book is a testament to Schrepel’s mastery of the subject matter and deserves a place on the (virtual) bookshelf of every lawyer and technologist open to investing in a bold, collaborative vision of the future. A great deal is unresolved, and this reader eagerly anticipates the publication of future instalments of ‘law + technology’. 

Ben Evans holds an LLM in IT & IP Law and is a Postgraduate Researcher at the University of East Anglia Law School. His research is focussed on the problem of data advantage, and he is a member of the Centre for Competition Policy and the Society for Computers and Law.

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