ICYMI: Delrahim – Why American Antitrust Policy Is A Success
Last Friday, MLex reported Assistant Attorney General Makan Delrahim said, “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?”
The World Economic Forum reports that last year 57 startups reached “unicorn” status, up 33 percent from year before. 56 percent were American, 32 percent were Chinese. 7 percent were British, and none were from Continental Europe. Below are four additional points Delrahim has made in recent weeks.
#1 Delrahim believes 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 competition and consumers. 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.” (Makan Delrahim, “Don’t Stop Believin’: Antitrust Enforcement In The Digital Era,” Chicago, 4/19/18)
#2 Contrary to critics of the current antitrust approach, innovation is included in the DOJ’s definition of consumer welfare, notes Delrahim. “I explained a few weeks ago in Rome how innovation is central to consumer welfare. The divestitures obtained in the Bayer/Monsanto transaction demonstrate this focus. In response to the Division’s concerns that the transaction would impact research and development in seeds and crop protection products valuable to farmers across America, the Division obtained significant divestitures, as I noted earlier. Several aspects of the divestitures specifically target preventing a loss in innovation from the transaction. All of this was done through the application of a consumer welfare lens.” (Makan Delrahim, “Stand By Me: The Consumer Welfare Standard And The First Amendment,” Washington, D.C., 6/12/18)
#3 Delrahim points out the current antitrust approach guards against the very real risk that antitrust becomes politically motivated. “Nor is that a small risk or merely a theoretical proposition. For example, when we were preparing our complaint in the AT&T/Time Warner case, we received a curious request from a state antitrust enforcer. They told us they would only join our case if we provided written assurances that no divestiture would go to Fox or to Rupert Murdoch. They actually wanted to direct the divestiture based on the viewpoint of the buyer, not on what benefits competition or consumers, as defined by the consumer welfare standard. We, of course, rejected the request, because it would have been unconstitutional to accede to it.” (Makan Delrahim, “Stand By Me: The Consumer Welfare Standard And The First Amendment,” Washington, D.C., 6/12/18)
#4 Delrahim argues the current approach to antitrust is flexible to challenges posed by digital 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.” (Makan Delrahim, “All Roads Lead To Rome: Enforcing The Consumer Welfare Standard In Digital Media Markets,” Rome, 5/22/18)