Introduction and Executive Summary

Abstract

Antitrust institutions in the United States and around the world are at a crossroads. Until now, antitrust has been based upon the consumer welfare standard, which has served as the lodestar of modern antitrust for the past 40 years. The hallmark of modern antitrust enforcement has been a case-by-case approach, driven by economic analysis and an evaluation of conduct on the merits. Courts and competition agencies have generally rejected invitations to jettison this successful approach in favor of presumptions of illegality and other shortcuts. The reason is simple: Relying upon presumptions instead of evidence risks rendering unlawful business behavior that in fact benefits consumers. But there is increasingly talk of a revolution that would overthrow the antitrust regime in the United States and, indeed, around the world. The drumbeat for this revolution appears to be strong and growing, with a broad range of enthusiastic participants and followers, including legal academics and economists, public intellectuals, think tankers, prominent members of Congress, and some foreign competition authorities. The would-be revolution has already had some success—at least as measured by the increasing discussion in academia, the popular press, and social media, and having embedded some of its central ideas in the platforms of both major U.S. political parties. Signs of the gathering revolution can also be seen in the various reports on antitrust and the digital economy emanating from around the world, such as those of the Stigler Center at the University of Chicago, the Australian Competition and Consumer Commission, The United Kingdom’s Competition and Markets Authority, the European Commission’s Directorate-General for Competition, the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, and other think tanks and governmental bodies. The more radical revolutionaries want an antitrust regime to address a myriad of perceived socio-political problems, including, but not limited to, income inequality, relative wage depression, and the concentration of political power. Some call for incorporating other forms of regulation—particularly regulation of data and privacy—into the antitrust laws and putting them in the hands of the antitrust regulators. Their revolutionary zeal is aimed generally at the digital economy and in particular at large tech firms. Their proposed “fixes” targeting the largest tech firms run the gamut from the reinvigoration of competition rulemaking at the Federal Trade Commission, to shifting the burden of proof from plaintiffs to defendants in antitrust litigation, to extending the reach of antitrust to content moderation decisions, to size-based presumptions akin to the antitrust approach of the 1960s, to creating a new agency with unlimited regulatory power. These proposals have been refined to the point that they are now ripe, in our view, for rigorous examination from an evidence-based perspective.