This paper is a full-blown defence of the New Brandeis movement by one of its most visible proponents. It is to be published in the Journal of European Competition Law & Practice and can be found here: https://academic.oup.com/jeclap/advance-article/doi/10.1093/jeclap/lpy020/4915966
The paper begins by mapping out the emergence of the New Brandeis (or anti-monopoly) movement as a reaction to growing concentration in the American economy. The movement takes its name from Louis Brandeis, who served on the US Supreme Court between 1916 and 1939 and was a strong proponent of America’s Madisonian traditions—which aim at a democratic distribution of power and opportunity in the political economy. The movement is anchored in the following pillars:
- There are no such things as market ‘forces’. The Chicago School assumes that market structures emerge in large part through ‘natural forces.’ The New Brandeisians, by contrast, believe the political economy is structured through law and policy.
- The goal of antimonopoly laws is to ensure that citizens are able to control and check private concentrations of economic power. The concern the antimonopoly laws address is that the concentration of economic power in private hands may undermine and overwhelm public government.
- Antitrust law is just one tool in the antimonopoly toolbox. Over the course of two centuries, Americans created a host of competition policy levers across government to promote competition within open and fair markets. As such, the antimonopoly movement is concerned with economic regulation more broadly.
- Antimonopoly does not mean ‘big is bad’. Certain industries tend naturally towards monopoly. To the New Brandeis movement, the answer in such cases is not to break up these firms, but to design a system of public regulation that prevents the exploitation of monopoly power. A second goal is to ensure that board members face the right incentives to provide the best service possible to everyone who relies on the monopolised industry to buy or sell a particular product or service. This may require both direct government regulation and various forms of antimonopoly law and policy interventions.
- The antimonopoly movement focuses on structures and processes of competition, not on outcomes. It is argued that the focus on consumer welfare over past decades has warped America’s antimonopoly regime, leading both enforcers and courts to promote ‘efficiency’ on the theory that this will result in low prices for consumers. The fixation on efficiency, in turn, has largely blinded enforcers to many of the harms caused by undue market power, including on workers, suppliers, innovators, and independent entrepreneurs. Contrary to how critics portray the New Brandeisians, this new school of thought does not promote using antitrust law to achieve a different set of social goals—like more jobs or less inequality. However, this movement does propose refocusing antitrust on the competitive process by looking at market structures and a broader set of measures to assess market power.
This is a very short paper. I am not going to criticise it – the papers below do so at length. I would merely point out that: (i) this approach is reminiscent of old European ordo-liberal approaches, with a sprinkle of pre-Chicago Harvard School; and (ii) while expanding the scope of enquiry to encompass the overall economic framework – something I have repeatedly advocated in previous emails as regards the digital economy –, the New Brandeis approach as outlined here is very vague about what specific role that antitrust/competition law should play in this and about what legal tests it should apply.