FTC Hearings on Competition & Consumer Protection in the 21st Century, FTC Docket No. FTC-2018-0091, Comments of the International Center for Law & Economics on the Consumer Welfare Standard (Hearing No. 5)

27 Pages Posted: 3 Feb 2020

See all articles by Geoffrey A. Manne

Geoffrey A. Manne

International Center for Law & Economics (ICLE)

Julian Morris

International Center for Law and Economics; Reason Foundation; IEA, Institute of Economic Affairs, U.K.

Kristian Stout

International Center for Law & Economics (ICLE)

Dirk Auer

International Center for Law & Economics (ICLE)

Date Written: December 31, 2018

Abstract

The CWS has been the subject of much discussion lately, largely driven by a seeming uptick in criticism of the standard. This criticism falls generally into two camps. On the one hand, the CWS is understood to be the broadly correct, if imperfect, touchstone for antitrust enforcement. Proponents of this view support the consumer- focused approach to antitrust but nevertheless often recognize the inherent shortcomings of the CWS (endemic to any general legal principle applied in complex and evolving economic circumstances), and particular areas where its operationalization can and should be improved (e.g. accounting for innovation harms or properly defining who counts as a “consumer”).

On the other hand, the CWS is objected to per se as an improper or incurably deficient guiding principle for antitrust enforcement. Proponents of this view see the CWS as inconsistent with the proper goals of antitrust, which should, they contend, focus on control of threats to the “process of competition” (as opposed to the welfare of consumers). Many of the adherents to this perspective also contend that antitrust should address private-sector economic threats to the democratic process more broadly. In both cases a key component of the antipathy to the CWS is that it has allowed for the sustained presence of large corporations in the polity — a presence that is alleged to threaten, simply by its existence, both competitive and democratic welfare.

In this comment we address the continued viability of the consumer welfare standard (“CWS”), its flexibility to include presumptions, as well as the relative weakness of proffered alternatives to the CWS.

Keywords: Antitrust, Consumer Welfare Standard, FTC, FTC Reform

Suggested Citation

Manne, Geoffrey and Morris, Julian and Stout, Kristian and Auer, Dirk, FTC Hearings on Competition & Consumer Protection in the 21st Century, FTC Docket No. FTC-2018-0091, Comments of the International Center for Law & Economics on the Consumer Welfare Standard (Hearing No. 5) (December 31, 2018). Available at SSRN: https://ssrn.com/abstract=3384363 or http://dx.doi.org/10.2139/ssrn.3384363

Geoffrey Manne (Contact Author)

International Center for Law & Economics (ICLE) ( email )

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Julian Morris

International Center for Law and Economics ( email )

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HOME PAGE: http://https://laweconcenter.org/author/julianmorriss/

Reason Foundation ( email )

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IEA, Institute of Economic Affairs, U.K.

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London SW1P 3LB
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Kristian Stout

International Center for Law & Economics (ICLE) ( email )

2117 NE Oregon St.
Ste 501
Portland, OR Oregon 97232
United States
5037700076 (Phone)
5037700076 (Fax)

HOME PAGE: http://www.laweconcenter.org

Dirk Auer

International Center for Law & Economics (ICLE) ( email )

5005 SW Meadows Rd.
Suite 300
Lake Oswego, OR 97035
United States

HOME PAGE: http://https://laweconcenter.org/author/dirkauer/

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