This issue of the Yale Law Journal above has provoked a reaction, which can be found here. The article argues, even as they present worthy policy recommendations, the contributions in this issue of the Yale Law Journal are disappointingly modest in scope, particularly in their acceptance of the consumer welfare standard.
Rather than contribute to and engage with the growing debate on the suitability of the consumer welfare standard, the contributing scholars write as though consumer welfare antitrust is cast in stone. This is so even though current antitrust doctrine has aided and abetted the concentration of numerous markets. Powerful businesses have used their might to hurt people in myriad ways, and consumer welfare captures at most only a subset of these public harms.
Not questioning the goals of antitrust—hardly even acknowledging that these goals, and particularly the consumer welfare standard, are contested—reveals a fixation on the technical trees at the expense of the philosophical forest.
At heart, his argument is that the contents and goals of antitrust are unavoidably political. Antitrust regulates state-enabled markets, which cannot be separated from politics. Most fundamentally, state action supports a market economy through the creation and protection of property rights and the enforcement of contracts. Other examples of state action necessary for the contemporary economy to function include corporate and tort law, intellectual property, inter- and intra-state commerce regulation, banking regulation, and monetary policy. Antitrust law, therefore, is part of government action that shapes the power of state-chartered corporations and the scope of their state-enforced property and contractual rights.
Furthermore, in formulating antitrust rules, lawmakers must determine whom the law seeks to protect. Antitrust law could conceivably protect consumers, small businesses, retailers, producers, citizens, or large businesses; but even identifying the protected group or groups does not fully determine the scope of antitrust. For instance, if consumers are antitrust law’s sole protected group, how should the law protect consumers? Antitrust could protect consumers’ short-term interest in low prices or focus on protecting their long-term interest in product innovation and product variety, just to name a few possibilities.
The history of antitrust law further demonstrates the political nature of the field. Although antitrust statutes have not been amended significantly in the US since 1950, the content of antitrust has changed dramatically since then. In the 1950s and 1960s, the courts and agencies interpreted antitrust law to advance a variety of objectives such as consumers’ interest in competitively priced goods, freedom for small proprietors, and dispersal of private power. It was only since the 1970’s that antitrust has been construed more narrowly to pursue solely consumer welfare.
The questions confronting us, therefore, are who should decide the goals of antitrust—technocrats or democratically elected representatives—and what those goals should be. Developments in competition law reflect technocratic preferences which were allowed to flourish in the absence of political control. But legislative inaction in this field is not inevitable.
Lastly, the author assesses the normative desirability of the ‘consumer welfare’ standard in antitrust. From the author’s perspective, the ‘consumer welfare’ goal fails on two grounds: (i) the US antitrust rules were adopted by Congress with a view to protect objectives other than consumer welfare; (ii) consumer welfare embodies an impoverished understanding of corporate power. Monopolies, oligopolies, and cartels do exercise great power over consumers, but the effects of corporate power are not limited to purchasers of goods and services. Large businesses exercise power over us in our capacities as consumers, entrepreneurs, workers, and citizens.