By Nathalie Voit
Sen. Chuck Grassley (R-IA) took to the stage Monday Sep. 27 to discuss the future of antitrust enforcement in the U.S. with Robert H. Bork, Jr., President of the Antitrust Education Project (AEP).
The discussion centered around what is now the 40-year-old governing principle behind antitrust law, the Consumer Welfare Standard. According to the AEP, the Consumer Welfare Standard arose in response to judicial overreach throughout much of the 20th century, an era that witnessed the politicization of antitrust law to the detriment of consumers.
Prior to the establishment of the standard, antitrust law was purview to the subjective whims of federal judges, who frequently found themselves swayed by “exotic goals” detached from any notion of consumer well-being. The lack of a clear guiding principle not based on any real economic analysis created inefficiency in the economy and inflated prices for consumers. Businesses that would not have survived under real market conditions were artificially bolstered by the government simply for being “small” and backed by “dealers and worthy men.” Old but discredited dogmas that automatically equated “big business” as “bad” gave rise to judicial decisions that ultimately harmed American consumers and stifled innovation.
The Consumer Welfare Standard designates the welfare of consumers as its guiding principle, with “economic efficiency” as the logical goal of antitrust law. The Consumer Welfare Standard created an environment that saw only the best businesses survive, and weaker firms pushed out of the market, the AEP explains.
But the centrality of the Consumer Welfare Standard to antitrust law is being challenged today. According to Bork and Sen. Grassley, modern antitrust law is being used as a legislative weapon for purposes that fall outside the law’s original scope.
Sen. Grassley and Bork said they worry about the efforts of the new administration to undermine the proper role of the judiciary when it comes to antitrust enforcement. According to the panelists, there is a concerted effort in the administration to shift more oversight power to the regulatory agencies, a move that could undermine “certainty in law.”
The speakers worry about the potential for federal agencies to start writing statutes, a decision that would destroy the viability of the courts to interpret the Consumer Welfare Standard and take us back to an era of malleability and the subjective politicization of antitrust law. According to Sen. Grassley, “certainty in law” forms the basis of the Consumer Welfare Standard and the underpinning of the rule of law. Any event that would do away with the legitimate powers of the court to oversee antitrust jurisprudence risks undermining certainty in the law and substituting a neutral principle with vague new theories. Moreover, the ambiguity of the new standards would allow the agencies to target essentially any business without a clear basis, creating an environment harmful to consumers and businesses alike, Sen. Grassley explained.
New proposals in Congress would also shift the burden of proof to the defendant, “tasking defendant corporations with the near-impossible task of demonstrating in advance that a given merger or acquisition won’t harm competition,” the AEP reported.
The panelists reiterated the importance of judicial review to the antitrust system, and the centrality of the Consumer Welfare Standard to contemporary antitrust law.
“I want the government to be a fair referee between the warring factions of our economy, nothing more, nothing less,” Sen. Grassley said.
