3D printing and the future of sunk costs in antitrust analysis

By Francisco Beneke*

I have heard about 3D printing before but never thought about its antitrust implications until now. After having a revelation-like moment, I decided to write a short post. I did some research (googled and did not go beyond the first results page, I confess) on this relationship but could not find much. Let me share what I think my revelation is.

Some futurists predict that 3D printing will soon take manufacturing industries by storm. What is so fundamentally disruptive about this technology is that it allows the same machine to manufacture/print all kinds of different products. As the technology evolves and we are able to print more and more goods instead of producing them in traditional factories, manufacturing across industries will be performed by machinery that is not market- or firm-specific. That means, sunk costs in physical assets will stop being a consideration.

If the same machine can print toothbrushes, glasses, shoes, and furniture, the risk of entering this activities will disappear and in theory we should see more competitive markets. 3D printing is already used in the production of auto and spacecraft parts and there have even been instances of house printing. In addition, this multi-purpose technology will free up resources to invest in other activities within the firm. We may see a lot more (or better) advertising, more R&D investment, or both.

According to Arun Sundararajan of NYU, in the future, we may see the average household owning a 3D printer that can print any type of physical product of a small enough size and printer shops for bigger, more complex goods. We will buy designs from a freelancer but we will have no more need of big factories and retail chains. This will be a world with easy hit-and-run entry and exit in almost all economic activities. A brave new world.

*Co-editor, Developing World Antitrust

@Paco_Beneke

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