WTAS: American Antitrust Framework Yields Best Results For Consumers And Promotes National Interest
This afternoon, the Senate Committee on the Judiciary will hold a hearing on the differences in antitrust enforcement between Europe and the United States.
The American approach to antitrust has provided enormous benefits to consumers, small businesses, and large corporations alike. Regulators must not overlook the importance of the consumer welfare standard, protecting competition rather than competitors, and promoting U.S. leadership across the globe.
Read more below.
The consumer welfare standard ensures low prices and protects competition law from political interference.
David Balto and Matthew Lane, Former Federal Trade Commission; Counsel to Computer & Communications Industry Association: “The consumer welfare standard is surprisingly simple. Alleged anticompetitive activities are held to one measure: whether they lead to more consumer harm than benefit. These harms can be in the form of higher prices, lower output, reduced quality or lost innovation. The neo-Brandeisians think this standard is too limiting, because what is good for consumers could potentially be bad in some other way.”
Makan Delrahim, Department of Justice: “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.”
Sen. Mike Lee, R-Utah: “The consumer welfare standard ensures relatively consistent antitrust enforcement and provides certainty to businesses, which can then operate knowing the laws will not drastically change from one administration to the other depending on who’s in power and which political party to which they belong.”
Unlike their European counterparts, American policymakers understand antitrust enforcement should be about protecting competition, not competitors.
Beth Wilkinson, Counsel to Federal Trade Commission: “The FTC’s mission is to protect competition, and not individual competitors.”
Makan Delrahim, Department of Justice: “We should take action only with credible evidence of harm to competition and not harm to just competitors.”
Maureen Ohlhausen, Former Federal Trade Commission: “When firms complain about the challenges of staying relevant and competing effectively in the modern economy, I may be personally sympathetic to the difficulties they face, but I care a great deal more about protecting the competitive process that has dropped these challenges into their laps. I make that policy choice not on the basis of some cold adherence to an abstract ideal, but because the process of entrepreneurial discovery in the free-market system over the last two hundred years has driven the greatest advancement in human living standards that the world has ever seen. Free, open, and competitive markets empower entrepreneurs to innovate and improve our lives in many ways both large and small.”
If American policymakers want to continue to expand U.S. leadership abroad, they should not emulate European tactics that artificially hamper some of the United States’ most successful companies.
Sean Heather, U.S. Chamber of Commerce: “The United States is home to the world’s most successful companies – success that has been achieved as a reward for constant innovation in the marketplace. Consumers, including other businesses, have flocked to their products and services. It is important that U.S. antitrust be vigilant and ensure businesses continue to earn market share by serving the consumer. However, the U.S. should reject European thinking that a firm that has earned its dominance needs to be punished and given a special responsibility.”
Gary Shapiro, Consumer Technology Association: “I urge our politicians to recognize our amazing good fortune to have created scores of large successful companies that every other developed country envies. We should be careful not to hobble these companies. If we hurt them, we endanger the American economic miracle.”
SHAPIRO: “Other regions of the world want what we have. Of course we need to discuss the appropriate legal frameworks for evolving technologies affecting much of what we do, but our national strategy should be focused on how we can unite to ensure our best companies can compete globally.”
Mark Jamison, American Enterprise Institute: “American antitrust practices are driven by customer welfare. EU antitrust is driven by many factors, including a desire on the part of EU officials to replace US tech companies with European ones.”
Larry Downes, Georgetown University: “While the size of the fine is unprecedented, the commission’s judgment is only the latest in a series of similar but escalating punishments, restrictions, tax rulings and legislation aimed at hobbling American tech companies. Though U.S. trade representatives have largely ignored it, the European Union has been waging a one-sided Internet trade war in a failing effort to protect the E.U.’s own floundering tech industry.”
Google represents a case study in these differing approaches; while the FTC determined the company has not engaged in any anti-competitive behavior, the European Commission has rendered some deeply flawed decisions against the search engine.
Federal Trade Commission: “The FTC concluded that the introduction of Universal Search, as well as additional changes made to Google’s search algorithms—even those that may have had the effect of harming individual competitors—could be plausibly justified as innovations that improved Google’s product and the experience of its users.”
Matt Schruers, Computer & Communications Industry Association: “Contrary to EU regulators’ recent finding, the FTC reasoned that ‘changes to Google’s search algorithm could reasonably be viewed as improving the overall quality of Google’s search results.’ Did this overrule FTC staff recommendations? No. FTC Commissioners emphasized that the Commission’s conclusion was ‘in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel.'”
Stephen Houck, Counsel to Computer & Communications Industry Association: “The advent of Android has dramatically increased consumer choice and created downward pressure on prices. As the D.C. Circuit stressed, there is nothing inherently wrong with bundling software and, to the extent Google has done so, a court is likely to consider it procompetitive not anticompetitive because it promotes interbrand competition, increases product stability, and does not foreclose use of rival applications. Bottom line, Google’s conduct bears little relationship to Microsoft’s in kind or effect.”