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The Antitrust Anti-Consensus

Decades after free marketeers gained an effective monopoly over the field of antitrust law, there is a new race to rethink this critical tool of economic governance. With a growing list of socioeconomic and political problems being attributed to the power of Big Business, the debate is as timely as it is controversial.

LONDON – Fifteen years ago, Herbert Hovenkamp of the University of Pennsylvania Law School and the Wharton School of Business, perhaps the most revered scholar in the field of US competition law, wrote that, “today we enjoy more consensus about the goals of the antitrust laws than at any time in the last half-century.” The supposed common objective of antitrust law (competition law in the European context) was straightforward: to maximize consumer welfare, measured in economic terms.

True, lawyers and economists would quibble about the precise meaning of this rather technical concept. Its narrowness seemed to be both a strength and a potential weakness. Though “consumer welfare” helps to orient antitrust law toward what it is best suited to achieve, it also arguably reflects a rather underwhelming vision of the law’s proper role. Nonetheless, by 2005, antitrust law’s transformation into what Hovenkamp called “an economic, not a moral, enterprise,” was essentially a done deal.

Not so in late 2020. As antitrust law has risen to prominence in public consciousness – owing to concerns about inequality, sustainability, the scale and influence of Big Tech, and lingering market skepticism after the 2008 global financial crisis – many have come to question the existing framework. This intellectual shift is clearly reflected in the recent lawsuit brought by the US Federal Trade Commission and more than 40 states to break up Facebook. The suit channels longstanding concerns about the digital economy, where markets exhibit features – zero-price products, network effects, winner-take-all innovation – that are difficult to accommodate within the consumer-welfare framework that has been developed over the past half-century.

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