This paper – which can be accessed here – begins from the observation that antitrust law unquestionably has consequences for the distribution of wealth. Rigorous antitrust enforcement can make price-fixers and monopolists worse off while benefiting their customers (or, sometimes, their competitors). However, the redistributive consequences of competition law are limited.
As such, the question is: why would one want to use antitrust as a wealth distribution device when far more explicit statutory tools are available for that purposes, including tax law, minimum wage laws, welfare laws, etc.?
Hovenkamp advances a number of possibilities: (i) given its reliance on vague and open standards, antitrust allows one to use the judicial or administrative process without having to obtain legislative permission; (ii) a good deal of literature suggests that competitive markets are conducive to a more even distribution of wealth. To the extent this is true, we might use antitrust to equalize wealth distribution simply by making markets more competitive – but this is already a goal of antitrust; (iii) focusing on consumer welfare, as opposed to total welfare, as a means of protecting consumers. However, while the consumer v total welfare debate still rages on in academic circles, in practice its impact is limited. For example, it has never been found that a merger that led to efficiencies (i.e. increasing total welfare) has also led to consumer harm. Furthermore, consumer welfare standards seem to be applied in practice.
This leaves one question outstanding: are there any situations that warrant antitrust intervention even though intervention would make market output lower rather than higher? He thinks not. First, rather than benefit consumers, such an intervention would mean that consumers would be robbed of lower prices or additional output. Second, there is no obvious way of limiting the application of such a test. Finally it is hardly clear that this antitrust policy of condemning firms that produce lower prices or higher quality than their rivals would yield a more attractive distribution of wealth than a policy of simply encouraging maximum, competitive output.
This is short and succinct, and it largely ignores the current debate on antitrust and inequality. This is not to say that the author does not know what the debate is about – i.e. whether antitrust should expand to deal with the new economy and (concomitant?) economic inequality, which would in practice require a change of antitrust’s goals and an adaptation of its legal standards. It is just that the argument is made from the point of view that the answer to this question is clearly and evidently “no”. The reasons for such an answer being obvious are a constant in Hovenkamp’s output – antitrust must be about welfare maximisation alone, because otherwise it will become confused, confusing, discretionary and impossible to administer. It is from this perspective that this article looks at whether antitrust should deal with inequality – and that it reaches the inevitable conclusion that this is not an antitrust concern more than what is already the case.