ICYMI: Four Questions For The Neo-Brandeisian Tech Critics
Daniel Crane, a University of Michigan law professor who focuses and has written six books and more than 60 articles on antitrust policy, recently posed four key questions to those who don’t believe current antitrust law is capable of addressing any competition concerns in the 21st century economy, the so-called Neo-Brandeisians. Highlights below:
1. Is the problem the consumer welfare standard or its implementation?
The consumer welfare standard is flexible and – in addition to price – includes innovation, quality, and variety, among other factors. “Some Neo-Brandeisians seem to think that the consumer welfare standard is narrowly focused on price effects and hence fails to take into account other important values such as quality, variety, and innovation. That is a misunderstanding. As the 2010 Horizontal Merger Guidelines make clear, generic principles of antitrust analysis are often expressed in price terms ‘[f]or simplicity of exposition,’ but all other factors affecting consumer welfare including ‘product quality, reduced product variety, reduced service, or diminished innovation’ should also be taken into effect. If current antitrust analysis is too focused on static efficiency, there is nothing within the frame of the consumer welfare standard that prevents pushing it in the direction of dynamic efficiency or some other aspect of consumer value.”
2. Is bigness or market power the curse?
If critics are concerned about market power and not sheer bigness – as they claim to be – the consumer welfare standard is “already on the case.” “What’s the concern: market power or bigness? If it’s market power, the consumer welfare standard is already on the case. If it’s sheer bigness, a dramatic shift in antitrust law — including major legislative reworkings of the key statutes — would be needed to address the ostensible problem.”
3. How do you choose between beneficiaries when conflicts arise?
A departure from the consumer welfare standard would force courts and agencies to play favorites and pit one interest group over another. “What would happen in a system that was nominally designed to protect consumers, workers, labor unions, small business, new entrants, and existing competitors all at once? Since the interests of those groups are often in conflict, courts and agencies would have to pick their favorites on the fly, without any objective principle to decide among them. This would be a recipe for subjective and favoritistic decision-making, and it would raise serious rule of law problems. Opponents of the consumer welfare standard seem to dismiss this concern by assuming away the conflict, as if the ‘right’ set of antitrust rules would simultaneously protect a broad set of deserving beneficiaries, goring only the ox of ‘big business’ and monopolists. That belief is naïve. History has shown that competition rules invariably involve trade-offs. Protecting small business from larger firms comes at the cost of increasing consumer prices.”
4. Is big government also a curse?
These critics are exceedingly wary of successful businesses, but have no problem at all with an increasingly big government. “Brandeis’ preoccupation with ‘bigness’ was not limited to large corporate scale — he was also deeply concerned with large governmental scale. As Jeffrey Rosen has observed, ‘[d]enouncing big banks as well as big government as symptoms of what he called a ‘curse of bigness,’ Brandeis was determined to diminish concentrated financial and federal power, which he viewed as a menace to liberty and democracy.’ Do the Neo-Brandeisians share Brandeis’ concern over excessively large government as well as excessively large business? Are they Jeffersonian in preferring small-scale organization in both government and business, or will they follow the Elizabeth Warren/Bernie Sanders wing of Progressivism in embracing Hamilton on governmental scale and Jefferson on business scale?”