Antitrust, Competition Policy, and Inequality

Abstract

Economic inequality recently has entered the political discourse in a highly visible way. This political impact is not a surprise. As the U.S. economy has begun to recover from the Great Recession since mid-2009, economic growth has effectively been appropriated by those already well off, leaving the median household less well off. The serious economic, political and moral issues raised by inequality can be addressed through a panoply of public policies including competition policy, the focus of this article. The article describes the channels through which market power contributes to inequality, and sets forth a range of possible antitrust policy adjustments that might be considered in response to that market power, or to inequality more generally. The aim of this article is to identify various potential competition policy alternatives that would respond to concerns about inequality, while recognizing that some are more controversial and provocative than others. These policy adjustments include embracing the consumer welfare standard, increasing enforcement agency budgets, targeting enforcement and remedies to benefit the less advantaged, adopting more interventionist antitrust and regulatory standards, recognizing abuse of dominance as an antitrust offense, and adopting reduction of inequality as an explicit antitrust goal.

Keywords: antitrust, market power, inequality, wealth distribution, income distribution, consumer welfare

JEL Classification: K00, K30, K39, L40