Goals Of Antitrust Research Articles

Antitrust's Goals in the Federal Courts

Antitrust's Goals in the Federal Courts

Why Economists Should Support Populist Antitrust Goals

Why Economists Should Support Populist Antitrust Goals

Antitrust House Judiciary Committee Antitrust Subcommittee Testimony

Much of the competition policy discussion today centers around goals of antitrust. Until recently, the only antitrust goals discussed in the US were economic ones. Anyone who thought otherwise was on the fringe and often discounted both academically and within policy circles. Yet today, the goals of antitrust once again have become the subject of debate due to a concatenation of events. Growing populism on both the left and right in the United States and globally; a number of studies showing increased income inequality and increased concentration; digital transformations across industries that disrupt traditional ways of organizing economic activity and life more generally; trends towards protectionism and economic sovereignty; and the lingering effects of the Great Recession in some countries all have caused people in policy settings, some antitrust authorities, and some scholars to question whether an economics-based goal focused on effects to consumer and competition (which for shorthand I call the “consumer welfare” standard) is relevant and whether competition can be used to achieve particular results. This testimony before the House Judiciary Committee Antitrust Subcommittee covers the following topics: The Importance of Economic Analysis and Antitrust Common Law Fairness in Antitrust Antitrust instrumentalization Antitrust and “Tech” Bipartisan support for economic analysis in antitrust Courts have expressly embraced economic analysis Antitrust Non-Price Enforcement Antitrust history offers an example of what political antitrust can do (badly) Merger thresholds are adequate Agencies, guided by economic analysis, do a good job given the overall uncertainty of addressing mergers Are tech acquisitions different for start ups? How should we think about vertical mergers? Agencies should not be duplicative of investigations into the same companies Agencies should invest in more tech knowledge Agencies need to better understand the value of different types of platforms More money invested in competition advocacy

How Chicago Economics Distorts “Consumer Welfare” in Antitrust

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This article argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Judge Bork adopted CW from economics where welfare unambiguously measured utility or well-being. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This article contends that antitrust policy is not welfare based at all and, that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increase welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

American Gothic: How Chicago School Economics Distorts 'Consumer Welfare' in Antitrust

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

American Gothic: How Chicago Economics Distorts “Consumer Welfare” in Antitrust

Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.

Changing South Africa's Competition Law Regime: A Populist Departure from International Best Practices†

Key Points: The Amendment Bill alters key provisions of the South African Competition Act focusing specifically on the redistribution of wealth and transformation of ownership in lieu of pursuing traditional antitrust goals. The Bill provides for greater ministerial intervention at the initial stage of a merger (based on national security), during the merger investigation (based on public-interest grounds) and broadens the right of appeals to parties outside the merger control review. The Bill lowers the standard that the South African Competition Commission must meet to prosecute cases and foreshadows a risk of increased third-party interventionism more generally. The departure from a traditional substantial lessening of competition (SLC) test to an adverse effects-based test, which takes public interests considerations into account, is likely to result in the injection of greater subjectivity into the decision-making process and parties’ increased difficulty in self-assessment of conduct particularly in relation to dominant firms.

Consumer Welfare Theory as an Ethical Consideration:: An Essay on Hipsters, Invisible Feet, and the “Science” of Economics

This article outlines the principle of efficiency as taken from physics and misapplied into the realm of economics. The result of the misapplication has been a narrow view of antitrust policy, culminating in an extremely conservative application of the consumer welfare standard. The result of such policy has been increasing concentration in many industries, abdication of any examination of monopoly power in the context of Section 2 of the Sherman Act, and dogmatic defense of “consumer welfare” as the only scientific approach to antitrust law. Part II reviews of the original goals of antitrust, as viewed without the lens of present-day economic efficiency. These are policy goals as described in legislative history and judicial development of common law. As such, they are ethical considerations distinct from consumer welfare. In part III, the article discusses the central tenets of economics in antitrust policy. These central notions are policy considerations that are misapplications of physics. Part IV discusses the physics definition of efficiency, with some insights as to the issues arising from adopting such a standard in terms of antitrust markets. Part V addresses the failures of antitrust using the lens of physics, explaining that consumer welfare is an ethical argument, not a scientific one. Part VI addresses other potential ethical standards for antitrust enforcement, as well as empirical evidence that support such norms. Part VII offers concluding thoughts where the article argues that there are superior ethical norms that would boost antitrust enforcement and that are consistent with the goals of antitrust.

Book Review: The Normative Foundations of European Competition Law: Assessing the Goals of Antitrust through the Lense of Legal Philosophy, by Oles Andriychuk. (Edward Elgar. 2017)

Book Review: <i>The Normative Foundations of European Competition Law: Assessing the Goals of Antitrust through the Lense of Legal Philosophy</i>, by Oles Andriychuk. (Edward Elgar. 2017)

The Multiple Goals of Antitrust

This article proceeds by briefly describing the origins and transformation of the consumer welfare model, arguing that as a designated exclusive goal for antitrust, it is both confusing and incomplete. The discussion then turns to fundamental questions about what we want from our political economy generally and from antitrust more specifically, demonstrating that the answers are not well captured by the “consumer welfare” rubric. In fact, there are multiple economic, political, cultural, and historic values at work, and there are significant shortcomings if we try to make any one economic value the singular lodestar. At the same time, holding that there are multiple goals also has important shortcomings. We offer an alternative way of conceptualizing the question of goals, in which the primary objective of antitrust and competition policy is to promote and protect a political economy that provides the society’s best mixture of competition and cooperation, given its culture, history, technology, and political situation at a given period of time.

FTC Hearings on Competition &amp;amp; Consumer Protection in the 21st Century, FTC Docket No. FTC-2018-0091, Comments of the International Center for Law &amp;amp; Economics on the Consumer Welfare Standard (Hearing No. 5)

The CWS has been the subject of much discussion lately, largely driven by a seeming uptick in criticism of the standard. This criticism falls generally into two camps. On the one hand, the CWS is understood to be the broadly correct, if imperfect, touchstone for antitrust enforcement. Proponents of this view support the consumer- focused approach to antitrust but nevertheless often recognize the inherent shortcomings of the CWS (endemic to any general legal principle applied in complex and evolving economic circumstances), and particular areas where its operationalization can and should be improved (e.g. accounting for innovation harms or properly defining who counts as a “consumer”). On the other hand, the CWS is objected to per se as an improper or incurably deficient guiding principle for antitrust enforcement. Proponents of this view see the CWS as inconsistent with the proper goals of antitrust, which should, they contend, focus on control of threats to the “process of competition” (as opposed to the welfare of consumers). Many of the adherents to this perspective also contend that antitrust should address private-sector economic threats to the democratic process more broadly. In both cases a key component of the antipathy to the CWS is that it has allowed for the sustained presence of large corporations in the polity — a presence that is alleged to threaten, simply by its existence, both competitive and democratic welfare. In this comment we address the continued viability of the consumer welfare standard (“CWS”), its flexibility to include presumptions, as well as the relative weakness of proffered alternatives to the CWS.

The Harvard and Chicago Schools and the Dominant Firm

The Chicago School has produced many significant contributions to the antitrust literature of the last half century. Thanks in part to Chicago School efforts today we have an antitrust policy that is more rigorously economic, less concerned with protecting noneconomic values that are impossible to identify and weigh, and more confident that markets will correct themselves without government intervention. This Chicago School revolution came at the expense of the Harvard structural school, which flourished from the 1930s through the 1950s. That school rested on a fairly rigid theory of Cournot oligopoly, exaggerated notions about barriers and impediments to entry, and a belief that certain types of anticompetitive conduct were more-or-less inevitable given a particular market structure. However, the chastised Harvard School that emerged in the late 1970s in the writings of Phillip E. Areeda and a converted Donald F. Turner were much less ambitious about the goals of antitrust, more concerned with conduct as such, and significantly more skeptical about the benefits of aggressive judicial intervention.This story of a victorious Chicago School and a humbled and disciplined Harvard School is incomplete, however. The antitrust case law reveals something quite different. On most of the important issues this chastised Harvard School has captured antitrust decision making in the courts, and largely in the enforcement agencies. This paper explores these differences, focusing mainly on dominant firm practices.

Antitrust Goals, Procedures, and Policies in the U.S. and the EU

The U.S. and the EU have somewhat similar antitrust policies, and both have been globally influential. This article, however, argues that the differences between the two systems of antitrust are deep and fundamental and that convergence is therefore sharply constrained. We explore those contentions by examining differing goals, differing procedures, and differing policies.

The View from the Shop—Antitrust and the Decline of America’s Independent Businesses

Small businesses have declined sharply in both numbers and market share across many sectors of the economy. There is evidence that this decline is owed in part to anticompetitive behavior by dominant firms, which have used their market power to disadvantage smaller competitors and exclude new entrants. These abuses have gone unchecked because of changes in the ideological framework guiding antitrust enforcement. About thirty-five years ago, policy makers came to view maximizing efficiency, rather than maintaining fair and open markets for all competitors, as the paramount goal of antitrust. There are at least three reasons to bring a commitment to small businesses and fair markets back into antitrust policy: small businesses deliver distinct consumer benefits, contribute to a more equitable distribution of income and opportunity, and safeguard democracy.

The View from the Shop Antitrust and the Decline of America's Independent Businesses

Small businesses have declined sharply in both numbers and market share across many sectors of the economy. There is evidence that this decline is owed in part to anticompetitive behavior by dominant firms, which have used their market power to disadvantage smaller competitors and exclude new entrants. These abuses have gone unchecked because of changes in the ideological framework guiding antitrust enforcement. About thirty-five years ago, policymakers came to view maximizing efficiency, rather than maintaining fair and open markets for all competitors, as the paramount goal of antitrust. There are at least three reasons to bring a commitment to small businesses and fair markets back into antitrust policy: small businesses deliver distinct consumer benefits; they contribute to a more equitable distribution of income and opportunity; and they safeguard democracy.

The Antitrust Contributions of Roger Blair

Roger Blair has made a significant impact on the fields of antitrust law and economics. Roger’s scholarship can be divided into a number of themes: intellectual property and innovation, health care, vertical restraints (including franchising), goals of antitrust, buyer power, economic evidence and expertise, remedies, sports, efficiencies, and private enforcement of antitrust. This essay surveys his work and a special issue of the Antitrust Bulletin devoted to Blair's writing.

Roger Blair and the Goals of Antitrust

This article examines Roger Blair’s remarkable scholarship concerning the goals of the antitrust laws. Blair has been a consistent advocate of a “general welfare” as opposed to a “consumer welfare” standard for antitrust, but he has also repeatedly observed that the choice of a test makes a difference in only a few cases. His scholarship also uncovered important inconsistencies in antitrust analysis. One is its treatment of bilateral monopoly, in which antitrust often condemns practice that are welfare increasing to the extent that they reflect the presence of countervailing power in bilateral monopoly markets. For example, buyers’ cartels in response to seller market power are unlawful per se even though many are welfare improvements over the existing situation. Consistent with his premise, Blair advocates a strong efficiency defense in merger cases, and shows that the Albrecht rule condemning maximum resale price maintenance is indefensible on both general welfare and consumer welfare grounds.

Consumer Choice as the Ultimate Goal of Antitrust

The mission of the antitrust laws need to be clarified, and this article asserts that the best way to do this is to interpret and enforce these laws in terms of consumer choice. This reformulation is necessary due to uncertainty and instability that exists in the field. This article will 1. define the consumer choice approach to antitrust or competition law and show how it differs from other approaches; 2. show that the antitrust statutes and theories of violation embody a concern for optimal levels of consumer choice; 3. show that the antitrust case law embodies a concern for optimal levels of consumer choice; 4. present evidence of the new paradigm: United States v. Microsoft; 5. argue that non-price competition should become a higher priority for antitrust enforcement; 5. Discuss consumer choice and the media.

A Socioeconomic Approach to Antitrust: Unpacking Competition, Consumer Surplus, and Allocative Efficiency

The primary function of socioeconomics is to ask questions and broaden the discussion. I have attempted to do that by unpacking and contextualizing the two economic goals of antitrust law – maximizing consumer surplus and allocative efficiency. I have avoided what I believe is today’s faith-based approach as exemplified by the Supreme Court. That approach has now gone beyond economics and seems to reveal, in its most benign form, a deep distrust of government. At its most basic and obvious level the two antitrust goals cede to those with income – earned or not – the right to determine how scarce resources will be used. That may be fine in many respects and may be far superior to any other method. The problem is that consumer surplus is under-inclusive, recognizes only a small universe of values, and falls well short of measuring actual well-being. When the focus is on allocative efficiency and costs of production, antitrust courts and enforcement agencies are unlikely to recognize all costs and can perpetuate a race to exploit. To the extent the race to exploit is repugnant to some, they may be able to express that in markets but only to a limited extent.

On the Inefficiencies of Efficiency as the Single-minded Goal of Antitrust

This article provides a skeptical look at the role of “efficiency” in antitrust analysis. It begins by discussing how various types of efficiency may be in conflict, such that the concept is actually less scientific or useful than often thought. The article asks, What economic considerations are excluded from today’s antitrust analysis? This leads to a discussion of political, social, and non-efficiency economic values; externalities; and three types of inefficiencies that may be caused by the single-minded hunt for efficiencies: X-inefficiency; diseconomies of scale, scope, and coordination; and the “too-big-to-fail” problem. Finally, the article describes some challenges facing reform proposals, including problems of prediction and quantification. The conclusion argues that the efficiency goal is fraught with problems and that a broader concept needs to take into account inefficiencies as well as efficiencies.