Biden’s reactionary trustbuster seeks to resurrect precedents that were out of date 40 years ago

See Lina Khan and the FTC Go Back to the Antitrust Future by Timothy J. Muris. He is a professor at Antonin Scalia Law School. Excerpts:

"Consider the Robinson-Patman Act of 1936, which reflected a theme of Mr. Biden’s enforcers: Big is bad. The “bigness” under attack was the new chain retailers, most notably the Great Atlantic & Pacific Tea Co. A&P, which closed the last of its stores in 2015, was America’s largest retailer from the 1920s until the mid-1960s. It and its imitators used vertical integration, economies of scale and greater reliance on data to provide attractive products at lower prices, especially benefiting the less wealthy. Traditional retailers and the middlemen who supplied them suffered, and became huge supporters of Robinson-Patman.

Sen. Joseph T. Robinson (D., Arkansas) and Rep. Wright Patman (D., Texas) failed to enact their original draft inspired by industry-written, government-endorsed codes designed to raise prices. So they resorted to language that is vague, frequently self-contradictory, and subject to varying interpretations. For decades, the FTC interpreted the statute aggressively, reflecting antipathy toward chain stores and the growing number of large suppliers. The prices those suppliers and brokers charged became a major FTC focus, and Robinson-Patman was the FTC’s major antitrust tool through the 1960s.

The enforcement of Robinson-Patman raised costs and otherwise hurt the low-priced chains that were its intended targets, harming consumers. After decades of withering criticism, first from the academy and the practicing bar, courts rejected some of the FTC’s positions, a trend that accelerated as attacks grew, including from a minority within the FTC itself in the 1960s. A 1969 American Bar Association panel excoriated FTC enforcement. The commission eased off on the statute in the 1970s and has virtually abandoned it since.

The Justice Department issued a devastating report in 1977 detailing the many follies of FTC enforcement and the significant costs for businesses and consumers alike. Since the 1970s, court decisions have significantly, albeit incompletely, interpreted Robinson-Patman consistent with the pro-competitive economic purpose of the rest of antitrust law. Yet Ms. Khan praises the law as a means of controlling what she calls the excessive power of modern retailers."

"In seeking comments on the appropriate analysis to use for mergers, the Biden antitrust agencies relied almost exclusively on decisions and concepts before the last 40 years, especially from the Warren court. Ms. Khan recently called those cases “controlling precedents.”

That case law was anticonsumer, incoherent and illogical, condemning bigness for its own sake—even when the mergers weren’t particularly large. The Supreme Court invalidated multiple mergers with combined market shares under 10%, as low as 4.5%, often in industries with numerous competitors. After stating that the relevant statute protected “competition, not competitors,” the justices infamously proceeded to do exactly the opposite, favoring inefficient competitors and thereby harming consumers."

"Ms. Khan notwithstanding, these precedents are hardly controlling. As long ago as the Carter administration, courts rejected merger challenges with stunning frequency. Between 1977 and 1983, the FTC won only eight of 22 merger decisions, an historically abysmal record."