Why Consumer Welfare Remains the Standard for Antitrust

Competition law need not conflict with the rule of law

Letter to The WSJ.

"The consumer-welfare standard, defended eloquently by Phil Gramm and Christine Wilson in “The New Progressives Fight Against Consumer Welfare” (op-ed, April 4), is fundamental to advancing the rule of law in antitrust. It provides a clear benchmark for understanding when business conduct is economically beneficial to consumers, while also benefiting workers and producers.

When producers obtain raw materials more cheaply, savings can be passed on to consumers. When workers are more productive, they tend to earn more and can buy more goods or save money. Worker efficiency helps companies produce more and better goods, reducing prices further. Consumers are emphasized because, in the end, everyone is a consumer.

The consumer-welfare standard isn’t concerned with a business’s size or industry. Maintaining the rule of law necessitates that antitrust enforcers not discriminate. This creates an equal playing field, again to the benefit of consumers.

Abandoning the consumer-welfare standard and considering a broader range of conduct to be antitrust violations would undermine years of progress. By assigning weights and making judgments based on ill-defined criteria like “fairness,” enforcers would be picking winners and losers, arbitrarily and inconsistently applying antitrust in defiance of the rule of law.

For most of the 132 years that antitrust laws have been on the books, enforcement has been inconsistent and unpredictable. In the late 1970’s, acceptance of consumer welfare as the guiding principle allowed for unprecedented growth and innovation. The last thing we should do is quickly throw out the consumer-welfare standard, disrupt the rule of law, and introduce a new and arbitrary standard that threatens this success story.

Alden Abbott

Mercatus Center at George Mason

Arlington, Va.

Mr. Abbott was the Federal Trade Commission’s general counsel (2018-21)."