The Brazilian was highly criticised following the Gunners' 2-2 draw with the Reds on Wednesday when he was thrown into the match following a thigh injury to Kieran Gibbs.
"Maybe people speak that he had a difficult game [against Liverpool] but he lacks competition," Wenger told the club's official website.
"He is a style of player who needs competition because he is not a nervous type of player, he is a stamina type of player and get sharper through competition. Yes [the criticism of Santos is unfair] because if you watch the game again and you analyse very well his performance, you will be less critical."
Wenger entered the transfer market late on deadline day when he secured the services of full-back Nacho Monreal from Malaga.