Commentary from Makan Delrahim, Andrew Finch, & Roger Alford
Commentary from Assistant Attorney General for Antitrust Makan Delrahim
AAG for Antitrust Makan Delrahim recognizes the healthy state of the American tech industry and rightfully identifies that the consumer welfare standard is flexible enough to handle 21st century industries.
February 2019 – The consumer welfare standard is flexible enough for 21st century companies and industries, including “zero-price” tech services.
At The Silicon Flatirons Annual Technology Policy conference Delrahim explained how zero-price markets are covered by the consumer welfare standard of antitrust because it analyzes market power beyond price.
“Third, in the context of zero-price goods, it becomes particularly important to look at non-price competition. Price is only one dimension of competition. Firms in zero-price markets presumably continue to compete against each other on quality, choice, and innovation. These competitive factors are part of our traditional consumer welfare standard and deserve our attention and perhaps renewed focus.”
See more at: “STRS: The FT Misses The Mark On Antitrust & The Consumer Welfare Standard,” 2/5/19
January 2019 – Data can be shared for an unlimited amount of time with an unlimited number of parties, unlike physical commodities like oil.
At State of the Net 2019 conference Delrahim described how information, unlike oil, is not finite. Consumers can choose to share their data as many times and with as many companies as they please.
“I don’t know if that’s the appropriate way of looking at it. If I had ten dollars and if I had to give away a dollar for a product each time, I can only do that ten times. But I can provide my information to an infinite number of sources who ask for my name, my email, my cell phone number if I so choose to provide that in exchange for that.”
See more at: “ICYMI: Makan Delrahim — The Consumer Welfare Standard Can Handle The Digital Economy,” 2/14/19
January 2019 – Mergers have generated pro-competitive benefits, including innovation in tech.
At State of the Net 2019 Delrahim noted that mergers of tech companies have led to innovation.
“We may not have had what we have today had those transactions not occurred, and that’s sometimes the pro-competitive benefits of mergers.”
November 2018 – Venture capital continues to find new, innovative startups – the role of antitrust should be focused on competition.
In an interview on CNBC, Delrahim said that Silicon Valley and the venture capital world are alive and well in the United States and that antitrust laws need to be there to make sure that they do not prevent the next competitor from arriving.
“It seems like Silicon Valley and the venture capital world, in this country, particularly, is alive and well. You’re having new companies pop up every now and then. But that’s what we do. Antitrust laws need to be there to make sure that they do not prevent the next competitor to come in. That was exactly what the Justice Department did in Microsoft 20 years ago, and a lot of people were worried about the power Microsoft had, and particularly when they were trying to suffocate the internet browser because it was challenging their monopoly power in the operating system.”
See more at: “STRS: Wu Ignores Reality Of Tech Competition,” 11/13/18
October 2018 – Antitrust should not stifle competition that delivers higher quality and lower prices for consumers.
In remarks delivered at the University of Haifa in Israel in Delrahim made clear his support for companies that can dominate the market purely through competition.
“As antitrust enforcers, we do not object if a firm comes to dominate a market purely by competition, including through superior quality or lower prices. As Judge Learned Hand wrote in his seminal Alcoa opinion in 1945: ‘The successful competitor, having been urged to compete, must not be turned upon when he wins.'”
See more at: “Tech Policy Cheat Sheet: FT Ed Board’s 2019 Tech Predictions,” 1/9/19
September 2018 – A large, growing company is a product of success in the marketplace, not an indication of wrongdoing.
At a conference in New York Delrahim explained that a company being successful does not mean it violated the law.
“Just because somebody is big does not mean they have violated the laws. Nor should we condemn them because they have succeeded.”
September 2018 – Dynamic competition empowers the best minds to try, fail, and succeed, creating an American tech industry with fertile ground for innovation.
On the Recode Decode podcast Delrahim said he is proud of the American tech industry and that it has very fertile ground for innovation.
“I look at it with a sense of pride as an American, but also that we are able to have some of the best minds and a community that is able to try, fail, succeed, and have a very fertile ground for innovation. Innovation, in my view, is really what ultimately helps the consumer. It’s dynamic competition. When you have those new products, new services, being brought to the consumer, and we just don’t know what we don’t know. Who would’ve thunk 20 years ago we would have the technologies we have today? No one.”
June 2018 – The success of antitrust enforcement should be measured by the number of innovators in the marketplace, not by the amount in fines levied.
In Mlex, Delrahim said he doesn’t measure the antitrust division’s success by fines or convictions; rather, he defines success by the number of innovators.
“I don’t measure the antitrust division’s success by the fines or convictions we get or how many cases in litigation we bring. I define US antitrust law’s success as the fact that we have these innovators. We have the Googles and the Facebooks and the Microsofts and the Ubers and the Airbnbs coming out of the United States. How many of those innovative companies are coming out of Europe or Korea or China?”
See more at: “STRS: The Consumer Welfare Standard That Drives American Antitrust Policy Is The Gold Standard,” 10/17/18
June 2018 – There is more to consumer welfare than price: “product variety, quality, innovation, and an efficient market allocation” are also protected under federal appellate law.
In remarks delivered at the Open Markets Institute Delrahim explained that federal appellate law looks at more than just price, it also considers product variety, quality, innovation, and market allocation.
“The D.C. Circuit described the breadth of the consumer welfare standard last year in affirming the United States’ victory challenging the merger of health insurers Anthem and Cigna. ‘[P]roduct variety, quality, innovation, and efficient market allocation—all increased through competition—are … protected forms of consumer welfare.’ Likewise, the antitrust laws protect competition even in markets that are not end-consumer facing, such as the labor markets alleged in our recent and on-going actions against employer no-poach agreements.”
See more at: “Setting The Record Straight: Data Is Not The New Oil & Other Misconceptions,” 6/22/18
May 2018 – The consumer welfare standard is flexible enough to address the tech platforms and business models.
In remarks at the Jevons Colloquium Delrahim said the consumer welfare standard is flexible enough to address competitive threats posed by newly developed technology like digital markets and platforms.
“As you are all aware, some critics assert that the antitrust consensus is not equipped to address competitive threats posed by new developments in technology—digital markets and platforms in particular. I don’t endorse that view. Indeed, last month at the University of Chicago Booth School of Business, I emphasized that the bipartisan antitrust consensus is flexible to challenges posed by digital platform markets because it can incorporate the latest economic wisdom in determining whether business practices or transactions are harmful to competition and consumer.”
See more at: “STRS: The FT Misses The Mark On Antitrust & The Consumer Welfare Standard,” 2/5/19
April 2018 – Critics of the current consumer welfare standard have yet to make an “evidence-based case” to revisit standards in digital sectors.
In remarks made at the University of Chicago Booth School of Business Delrahim noted that critics have not made an evidence-based case to revisit antitrust standards in digital sectors.
“More importantly, critics of purportedly increasing concentration have not made an affirmative, evidence-based case that revising existing antitrust standards would be an effective remedy. Nor have they demonstrated that a concentration-focused overhaul of the antitrust laws would benefit and consumers.”
April 2018 – Existing antitrust rules, like the consumer welfare standard, allow the impartial legal process to check political efforts.
In remarks made at the University of Chicago Booth School of Business Delrahim highlighted that impartial courts ensure a check on government power.
“Tempting as it is to hope for a lower standard of proof for proving antitrust violations, existing evidentiary standards serve a purpose—they ensure that impartial courts serve as a check on government power.”
November 2017 – Antitrust should be seen as a tool for law enforcement, not for new regulation.
In an address at the American Bar Association’s Antitrust Fall Forum in Delrahim noted antitrust action should be focused on law enforcement, rather than new regulation.
“A short-term remedy is a band-aid, not a fix, and as FTC Commissioner McSweeny said last year, ‘the relief at best only delays the merged firm’s exercise of market power.’ On the other hand, if we make behavioral commitments indefinite, then we really are becoming full-time regulators instead of law enforcers.”
Commentary from Deputy Assistant Attorney General for Antitrust Andrew Finch
December 2018 – Increased concentration does not necessarily imply decreased competition.
In a speech at the Capitol Forum’s Fifth Annual Tech, Media, and Telecom Competition Conference Finch discussed antitrust markets including that increased concentration does not necessarily imply decreased competition.
“First, we have to remember that antitrust laws are concerned with competition, not concentration. Concentration may indeed be scary, but the relevant question is really whether competition is still working to benefit consumers. Our focus is on the competitive process and applying the consumer welfare standard to protect consumers’ interests in low prices, product quality, choice, and innovation. If concentration is the result of more efficient and better firms attracting customers through competition on the merits, we should conclude that antitrust is working exactly as it should.”
Commentary from Deputy Assistant Attorney General for Antitrust Roger Alford
May 2018 – The consumer welfare standard is a scalpel, the public interest standard is a sledgehammer.
In a speech at the Global Seminar Series in Dusseldorf Alford noted that the consumer welfare standard is a careful approach while the public interest standard is broad and easily biased.
“But as with any other law enforcement agencies, we as competition law enforcers must be ever vigilant about exercising our power properly, using precise tools rather than blunt instruments. The current debate between the consumer welfare standard and the public interest standard is illustrative of the tendency to trade the scalpel for the sledgehammer.”