FTC Commissioner Open to Antitrust Policy Alternatives
FTC Commissioner Noah Phillips said he’s open to alternatives to the consumer welfare standard, which guides U.S. antitrust law. The agency fielded a wide range of opinions about the standard during its fifth competition policy hearing Thursday.
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Relying on the consumer welfare standard, antitrust enforcers wrongly focus on the consumer impact, said Columbia Law School professor Tim Wu. He likened it to a referee watching for fouls that harm fans instead of fouls that harm the sport's competition. He called it an “absurd” standard, voicing support for the leading alternative: a competitive process standard.
The consumer welfare standard indeed is flawed, said University of California-Berkeley economist Carl Shapiro, citing “excessive burdens” on plaintiffs. Enforcers should focus on disruptions to the competitive process, Shapiro said. The tech industry needs sector-specific legislation to promote competition, said Public Knowledge CEO Gene Kimmelman, noting such legislation exists for almost all other sectors.
Former acting Assistant Attorney General Deborah Garza, now at Covington & Burling, warned against turning antitrust law into a tool to address all social ills. The Microsoft antitrust case is proof U.S. law is working, she said, and it would be “dangerous” to throw away the consumer welfare standard without a good replacement. The standard's value is it requires economic evidence of harm, she said. Consumers should remain at the center of the analysis, said General Electric Vice President-Global Competition Law and Policy Sharis Pozen, a former FTC and DOJ official. Pozen worries that shifting that focus will open the process to political agendas, saying the unintended consequences would far exceed the benefits.
The consumer welfare standard “must go,” said Open Markets Institute Executive Director Barry Lynn. It drives the U.S. to focus on material measures of well-being rather than political goals that prevent and keep citizens alert to concentrations of power, he said. Instead of favoring a new antitrust model, Lynn seeks a return to basic principles like industrial rules limiting any corporation to 25 percent of any market. Enforcers should shift to an effective competition standard, where dispersing private power is the principal objective of federal antitrust law, said University of Tennessee law professor Maurice Stucke.