US antitrust policy: Revolution or evolution?

“Big is bad” is back.1 Echoing the US antitrust policies of the 1960s, the new antitrust school of thought aims to use antitrust laws to protect small businesses, impose higher competitive standards on dominant firms and apply structural remedies to repair competitive concerns. Businesses with high market shares—no matter how gained—should start bracing now for antitrust scrutiny.

What’s changing?

We are witnessing a sea change in antitrust policy of a magnitude not seen since the 1970s. For the past half-century, US antitrust policy was dominated by the “Chicago School” of thought, which focused on economics, market share and statistical market concentration, with the goal of furthering “consumer welfare”—that is, targeting antitrust enforcement activity at business behavior that leads to higher prices or reduced output. But today, the “neo-Brandeis” antitrust movement is moving into power. Named after champion US Supreme Court Justice Brandeis, who described the risks to democracy that an over-concentrated market could cause, this rising movement seeks a return to the antitrust philosophies pre-Chicago School. This new philosophy aims for US antitrust enforcement agencies to protect small businesses, focus on structural remedies and consider a particularly high market concentration almost presumptively anticompetitive, regardless of that dominant business’s impact on price or output.

What does it mean for you?

Businesses with high market shares may now find themselves under the microscope. Proponents of the new antitrust school of thought are no longer on the sidelines. The neo-Brandeis movement has achieved mainstream acceptance, and its advocates in key positions to influence US antitrust policy include: Senators Amy Klobuchar and Elizabeth Warren and others in Congress; the White House’s National Economic Advisor Tim Wu; and leaders of US antitrust enforcement agencies, such as the FTC Acting Chair Rebecca Slaughter and FTC nominee Lina Khan. Businesses in highly concentrated markets or with high market shares should therefore expect increased antitrust enforcement agency scrutiny, both when they plan mergers and acquisitions—even vertical or conglomerate mergers—and with respect to their unilateral behavior.