ICYMI: Roger Alford: The Consumer Welfare Standard Is A Scalpel, The Public Interest Standard A Sledgehammer
Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division Roger Alford spoke in Dusseldorf Tuesday on the public interest standard’s problematic effect on competition enforcement.
Like Makan Delrahim, Assistant Attorney General of the Antitrust Division, recently noted, Alford focused on the careful approach of the consumer welfare standard versus the broad, easily-biased public interest standard.
Some key quotes from his speech below:
— If the consumer welfare standard is the scalpel, the public interest standard is the sledgehammer: “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.”
— The consumer welfare standard focuses on analysis; the public interest standard encompasses too many factors for clear answers: “One of the benefits of the consumer welfare standard is that it focuses the analysis. We know what to address in the analysis—benefits or harms to consumers—and competition enforcers have developed tools to do so. In contrast the public interest standard, depending how applied, can be a vague one—a blunt instrument. The broad reaches of the public interest encompass a host of factors, many of which may point one way or another on any particular transaction, especially if parties promise public interest benefits as part of their transactions.”
— The consumer welfare standard is agnostic to the provider of goods or services, avoiding any bias towards competitors: “The consumer welfare standard is designed to promote and protect efficiencies, thereby avoiding any preference between competitors. It is agnostic as to which provider of goods or services enhances the welfare of the consumer. By maintaining a singular focus on what is best for the consumer, we lay aside competing interests that sow the seeds for mischief. By eschewing a broad public interest standard and embracing a traditional consumer welfare one that focuses on core competition concerns, we promote the likelihood of non-discriminatory enforcement of the competition laws.”
— The public standard interest is so vague that its ability to discriminate undermines antitrust enforcement abilities: “A particularly dangerous application of the public interest standard arises when it is understood to permit discrimination in competition enforcement. Worse than just vagueness, a public interest standard used to discriminate can undermine the legitimacy of law enforcement.”
— The public interest standard could become a proxy for discrimination: “If one is not careful, the public interest standard may become a proxy for de facto discrimination. When antitrust laws pursue social or political goals—goals such as protecting national champions, aiding small businesses, or developing local technology expertise—the practical result may be to advantage domestic competitors over foreign ones.”