In defence of the consumer welfare standard

E VER SINCE its first antitrust law passed in 1890, America has argued over what trustbusting is for. One school, named after Louis Brandeis, a judge, holds that big companies must be tamed because they corrupt politics and damage customers, competitors and staff. The other says the goal of antitrust is to protect the welfare of consumers, which can be enhanced by big, efficient firms. For decades the consumer approach has been ascendant, but now the consensus has frayed and trustbusters are heading in a Brandeisian direction. This is a mistake. Competition policy needs reforms, to correct past failings and to adapt to the digital economy. Yet it should continue to be based on the principle that consumers are what count. A shift towards more politicised and expansive antitrust is taking place across the rich world. President Joe Biden has appointed trustbusters, such as Lina Khan (pictured) at the Federal Trade Commission, who are exploring new responsibilities like protecting small firms or workers. Since the 1990s the EU has tended to put consumers' interests first, but now its commissioner wants to apply a "broader notion" of harm. Lawmakers everywhere are redrafting rules to constrain technology firms, even when their products… Read full this story

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