As this blog has previously reported, new strains of thought about antitrust law are blossoming in the United States. The “New Brandeisians” challenge the Chicago School “consumer welfare” standard that has dominated policymaking for decades. They assert that the authors of the statutes that form the backbone of American antitrust law were primarily focused on the manifold danger of concentrated market power beyond simply the economic effects on the ultimate consumer.
As their critiques have gained more attention, so have their critics. A November 9 article in the New York Times headlined “Powerful Coalition Pushes Back on Anti-Tech Fervor” highlighted the influential people, institutions, and trade groups that still adamantly support the consumer welfare standard. An economist at the libertarian thinktank American Institute for Economic Research declared: “Hipster antitrust is overdue for a backlash.” Things are even getting personal; at a conference in May, New Brandeisian Tim Wu compared conservative economist Tyler Cowen’s belief that current levels of economic concentration are benign to people that believe the earth is flat and climate change is not real.
These direct clashes between supporters and detractors have helped move the debate forward. Upon being challenged by Professor Daniel Crane (a supporter of the consumer welfare standard) to articulate operationalizable principles, three New Brandeisians wrote the “Utah Statement.” (The challenge was issued at a conference held at the University of Utah). The introduction puts the impetus for their movement bluntly: “concentrated private power has become a menace, a barrier to widespread prosperity and an indefensible division of the spoils of progress and economic security that yields human flourishing.” The statement then recites four fundamental beliefs, ten doctrinal statements, and thirteen enforcement-related recommendations to remedy these perceived harms. Below are summaries of each; to read the Utah Statement in full, click on the link above.
The movement believes that excessive concentration is not just an economic threat, but a threat to democratic values. Subjecting private power to antitrust scrutiny and ensuring “fair competition” is both an economic and political imperative.
This section contains specific policy proposals that would generally make violations easier to prove and mergers harder to approve. Precedent that serves as a barrier to suit—like the holding in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993) that a predatory pricing claim requires a plaintiff to show that there is a “dangerous probability” the defendant will recoup its investment—should be overruled. Presumptions in favor of vertical mergers and restraints should be abandoned while structural adverse presumptions in merger review should be restored. The movement also prescribes changes to how workers are treated under the antitrust laws: The Clayton Act’s worker exemption should be extended and allow coordination and collective action of all workers regardless of employment status, and non-compete clauses should be outlawed.
Method and Enforcement Practice
This section emphasizes the New Brandeisian view that market structure and robust enforcement are of paramount importance. “Structural remedies are to be preferred.” Agency rulemaking should be used to promulgate antitrust rules, agencies should be far more concerned with failing to block an anticompetitive merger than mistakenly rejecting a merger that would not have caused anticompetitive impact, and private and public enforcers should embrace both prospective and retrospective analysis of mergers.
Though it may have first appeared that New Brandeisians were aimed at a specific target—the inadequacy of the consumer welfare standard in policing the dominance of big tech companies—the Utah Statement make clear that the movement’s ambitions go beyond any one industry and strike at the core of existing American antitrust policy. We will continue to monitor challenges to the consumer welfare standard, like the New Brandeis school, in the months ahead.