Don’t let Senator Hawley fool you: protecting consumers remains the goal
If Sen. Josh Hawley (R-Mo.) has his way, that may be a thing of the past.
Sen. Hawley has recently announced a pair of antitrust bills, notably “The Trust-Busting For the 21st Century Act.” The bill would amend the Sherman Act to exclude the need for defining a given market in specific circumstances, force defendants to show that commercially reasonable alternatives didn’t exist for anti-competitive conduct, and eliminate the consumer welfare standard in favor of a protecting economic competition standard. The bill would also make it more difficult for large firms to acquire smaller competitors, regardless of the potential pro-consumer benefits such an acquisition could generate.
These proposals all support the Senator’s underlying theory of competition: big is indeed bad. By attempting to prop up competitors which aren’t “big,” Sen. Hawley leaves American consumers out to dry.
To Sen. Hawley, it doesn’t matter that a company like Google can use data from its suite of products to perfect search engines or generate detailed maps. It doesn’t matter that a firm like Amazon can allow consumers to buy products and have them delivered in a matter of days. And it doesn’t matter that a company like Facebook can incorporate different functionalities to make its platform more useful. Competitors may not be able to offer the same efficiencies and therefore may struggle to keep up, but that doesn’t necessarily mean we should ignore the pro-consumer benefits that comes with “bigness.”
Large firms can undoubtedly cause harms to the competitive process, but existing jurisprudence takes a clear, fact-based approach. Courts first determine whether a firm has monopoly power in a given market. Then, assuming monopoly power exists, courts examine the specific conduct in question, looking at whether any pro-competitive justifications outweigh the anti-competitive harm.
Both elements are vital: one without the other presents no harm to competition writ large, even if conduct may harm individual competitors. Ultimately, strong competition among firms generates the most benefits for consumers who will see better products at lower prices. Undoubtedly, some firms will not be able to keep up, but so long as the competitive process is protected, consumers will be better off.
Sen. Hawley’s proposal ignores these facts. The proposal would arbitrarily change the standard from focusing on consumer welfare to protecting economic competition, a rebranding that carries little legal benefit and serves purely political and rhetorical ends. Current jurisprudence already carefully examines whether competition is harmed. As the U.S. Supreme Court has explained, “[t]he law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself. It does so not out of solicitude for private concerns but out of concern for the public interest.“
Changing the standard does little to protect competition. Instead, the change simply threatens to turn antitrust laws away from public interest and back to private concerns.
Big isn’t necessarily bad. Our competition laws look for the exclusion of competition through monopoly power and anti-competitive practices. Fierce competition is a good thing, and some competitors will lose. And clearly situations exist when a firm violates this standard, endangering the competitive process. But so long as regulators protect the competitive process, consumers will be better off.
The question, then: who do we want to protect? American consumers, or companies that can’t keep up?
Image credit: Komsan Loonprom
