Why Calls for Shifting to Brandesian Economic Theory is Flawed: An Evaluation of the U.S. and E.U's Approach to Vertical Mergers and why Consumer Welfare Should be Retained by U.S. Regulators

Abstract

The tech industry has exploded over the last few decades and progressive are advocating a shift in antitrust review of vertical mergers in the United States. The overall thrust of these positions advocated seek a modified economic theory based on the writings of the late Justice Louis Brandeis (Brandeisian economic theory) to control the vertical expansion of dominant tech firms such as Amazon. On a broad level, this position advocates a shift of US antitrust regulatory review towards the European Union application of antitrust regulation. In my view, this would not increase consumer welfare in the way these populists and Brandesian economists theorize it would. This article provides a review of both US and EU vertical merger theory and Chicago school economic theory while comparing and contrasting US and EU review of certain business practices to conclude Brandesian economics will not achieve the goal advocated and consumers will be worse off. This paper concludes with support for a proposal to modify and strengthen consent decrees following merger review in order to us a scalpel — rather than a sledgehammer — to adapt to the changes in the technological environment. Most importantly, this proposal would actually protect consumers, not competitors in the marketplace.