The last 50 years have been marked by major shifts in the nation’s approach to enforcing U.S. antitrust laws. For example, laissez-faire or “Chicago School” conservatism captured antitrust for almost four decades beginning in the 1970s, persuading enforcers and judges that vigorous enforcement stifled efficiency and chilled innovation. In fact, enforcement protects the very competition that spurs incentives for firms to become more efficient and innovative. Diametrically opposed is the more recent theory of “Anti-Monopoly” progressivism, defined by far left attempts to use antitrust enforcement to rectify a variety of economic, political, and social injustices. U.S. antitrust laws, however, are not designed for such purposes. Instead, they are intended to serve the broad public interest by assuring a level playing field for competition and protecting consumers through fair prices, choice and innovation. There is a suite of other policy tools that can more efficiently and effectively tackle the problems that the Anti-Monopoly movement seeks to cure with antitrust enforcement.
This PPI analysis unpacks the downsides and high opportunity costs resulting from the ideological swings that divert antitrust enforcement from a more pragmatic, consistent, and effective course. As Americans face the worst cost-of-living crisis since the 1970s, the imperative of vigorous antitrust enforcement that works in the best interests of competition and consumers has never been higher. This includes focusing on consumer-facing sectors like food, healthcare, housing, and transportation, where the abuse of market power is highly visible and is felt keenly in pocketbooks and paychecks.
The adverse effect of Chicago School conservatism on antitrust is well established. But the downsides of major features of Anti-Monopoly enforcement under the Biden administration are not. The report takes a deep dive into this question and concludes that while Anti-Monopoly enforcers did work to temporarily slow down consolidation, they also incurred high costs in pursuing a specialized agenda.
PPI’s report concludes with pragmatic proposals for a center-left antitrust platform to rein in harmful market power with discipline and consistency. These include codifying the principles advanced by “post-Chicago” enforcers, especially under the Obama administration and fortifying them with principles that clarify, update, and strengthen antitrust enforcement.
Proposals in the first category include: adopting a broad interpretation of the consumer welfare standard to include price and nonprice dimensions of competition; enforcing the “structural presumption” against illegal horizontal mergers; applying the antitrust laws to competitive problems in input, output, and innovation markets; and taking a skeptical view of efficiency justifications for anticompetitive consolidation and conduct.
The second category of proposals includes: reaffirming the central role of the consumer welfare standard in antitrust enforcement; adding a presumption against anticompetitive vertical mergers; reducing burdens on antitrust plaintiffs; raising the bar on efficiency claims; updating remedies policy based on evidence of past failures; and consolidating expertise in sectors like food, healthcare, and energy in either the Federal Trade Commission (FTC) or U.S. Department of Justice (DOJ).
