What is Antitrust Populism? Part One
“Antitrust populism” has been making its way back into the spotlight. Who are antitrust populists, and what would a return to their chosen policies mean for consumers? In their new paper, Antitrust Populism: Towards a Taxonomy, academics Joshua Wright and Aurélien Portuese seek to assess the return of antitrust populism in the digital era.
The first main takeaway from their piece: antitrust populism is grounded in a rejection of economic analysis, preferring instead to use antitrust as a political tool.
Antitrust populism is grounded in a rejection of economic analysis, preferring instead to use antitrust as a political tool. “What is antitrust populism? It could simply be said that antitrust populism is economic populism applied to antitrust matters. More precisely, antitrust populism entails both the rejection of rigorous economic analysis in favor of politically-driven competition enforcement, as well as suspicion of the role of experts and independent agencies on antitrust matters. The populist use of antitrust laws is ‘fashionable again.'”
Contemporary antitrust populism has its roots in the early 20th century, an era when antitrust enforcement lacked the backing of economic analysis. “There are parallels between this latest wave of populism and pre-1970’s American antitrust jurisprudence, when courts struggled with the Sherman Act’s broad mandate and ruled based on vague socio-political goals. The earliest courts understood antitrust law as a protection for small businesses and ‘worthy men,’ even if it meant sacrificing lower prices for consumers. In 1945, Judge Learned Hand declared ‘great industrial consolidations are inherently undesirable, regardless of their economic results.’ The case law that developed from these attitudes established crude bright-line rules based on market share structural presumptions, ushering a period of enforcement now almost universally recognized as detrimental to consumers.”
Populists advocate the use of antitrust tools to solve a broad array of perceived social and economic harms beyond competition. “Antitrust agencies should, according to modern antitrust populists, pursue a number of objectives, which are much wider than economic efficiency fostered through the consumer welfare standard. There are indeed a number of objectives which are propelled by proponents of a more politically-driven approach. These objectives are: fairness (or, more precisely, redistributive justice in an Aristotelian perspective), the fight against concentration (irrespective of harm to the competitive process), labor market mobility (despite labor laws and regulations essentially aimed at fulfilling this objective), and the fight against monopolization (irrespective of pro-competitive behaviors from ‘monopolists’).”