Ex-FTC Commissioner Wants Consumer Welfare Standard Codified
Congress should “enshrine” the consumer welfare standard into law and defend companies against the White House's aggressive attack on acquisitions, former FTC Commissioner Christine Wilson said Thursday.
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Under FTC Chair Lina Khan and DOJ Antitrust Division Chief Jonathan Kanter, the Biden administration has shown clear bias against Big Tech and private equity firms while ignoring the consumer welfare standard, said Wilson, who left the agency in March (see 2303020048). This bias is clear in the agencies’ recent merger guidelines (see 2312180069) and proposed changes to rules under the Hart-Scott-Rodino Act (see 2309280078), she said. After leaving the agency, Wilson founded the EdenSpring Foundation, which provides support for survivors of human trafficking and sexual exploitation. Wilson delivered her critique during an American Action Forum event.
The administration’s bias against specific sectors shows the agencies have no respect for the rule of law or due process, she said: “I think we need to enshrine the consumer welfare standard in a law.” Republicans often argue the consumer welfare standard is the core concept that should drive antitrust enforcement, rather than a focus on competitors.
Wilson and other event panelists were asked about comments from Kanter, who noted the consumer welfare standard isn’t specifically included in the agencies’ antitrust statutes. Former FTC Commissioner Noah Phillips acknowledged it’s true the standard isn’t explicitly included in any of the statutes; however, it’s been borne out through decades of case law defining competition. Phillips announced his resignation from the commission months before Wilson (see 2208090061). Both he and Wilson criticized shifting antitrust policies under Khan’s watch.
The agencies, through case law guidance, have interpreted competition to be “distributed rivalry,” and the concept of consumer welfare came out of a long-term effort to understand what that means, said Phillips, now a consultant at Cravath Swaine.
The consumer welfare standard isn’t “clear cut in the law,” said Diana Moss, Progressive Policy Institute competition policy director. Moss, who has described herself as center-left, agreed the consumer welfare standard can be found in agency guidance in case law. DOJ’s recent victory in blocking JetBlue Airways’ purchase of Spirit Airlines is a good example, said Moss. The “cognizable” harm was identified in higher prices and loss of consumer choice resulting from the potential combination, she said. The agencies’ merger guidelines also acknowledge the consumer welfare standard, said Moss. But this was included in the document only because of pushback from the center and center-left, she said.
Moss also noted that the agencies aren’t achieving historic enforcement levels, despite detractors' criticisms that new policies have made the merger environment untenable. Both agencies have “extolled” their “invigorated enforcement programs” with record-high enforcement, but the statistics don’t bear that out, she said, citing the decline in second-request rates under the Biden administration (see 2401040060). There has been a lot of “activity” under the leadership of Khan and Kanter, but not a lot of “achievement,” said Tim Muris, a Sidley antitrust consultant and former head of the FTC’s Competition and Consumer Protection bureaus.