Antitrust Law Daily Need for new antitrust standards, advocate questioned by advocacy group
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Thursday, August 10, 2017

Need for new antitrust standards, advocate questioned by advocacy group

By Jeffrey May, J.D.

In recent decades, Congress has been loath to tweak or tamper with the antitrust laws. However, Democratic lawmakers are now calling for antitrust reform as part of their "Better Deal." The Better Deal plan for empowering American families and workers, announced late last month, includes an effort to "crack down on monopolies and the concentration of economic power that has led to higher prices for consumers, workers, and small business." In order to accomplish this goal, Democrats intend to "revisit our antitrust laws to ensure that the economic freedom of all Americans—consumers, workers, and small businesses—come before big corporations that are getting even bigger."

Today, the American Antitrust Institute (AAI) questioned whether changes to current merger review standards or other changes proposed by the Better Deal were necessary to promote tougher antitrust enforcement. The advocacy group suggested that the "current antitrust toolkit appears to have what is necessary to accomplish what the Better Deal proposes."

The Better Deal antitrust reform plan would:

  • prevent big mergers that would harm consumers, workers, and competition;
  • require regulators to review mergers after completion to ensure they continue to promote competition; and
  • create a 21st century ‘Trust Buster’ to stop abusive corporate conduct and the exploitation of market power where it already exists.

With respect to merger review, the new standards proposed by the Better Deal "will ensure that regulators carefully scrutinize whether mergers reduce wages, cut jobs, lower product quality, limit access to services, stifle innovation, or hinder the ability of small businesses and entrepreneurs to compete," according to the proposal. Democrats also propose requiring frequent, independent reviews of mergers after completion. The plan calls for a "new competition advocate" who "would research current market activity, receive consumer complaints, and proactively recommend competition investigations" to the FTC and Department of Justice. These changes would undoubtedly require legislation that is unlikely to move forward in the current Congress, despite a growing populist sentiment against big corporations that are getting bigger.

While AAI supports vigorous antitrust enforcement, the group questions the need for "embarking on wholesale change in the U.S. antitrust regime." AAI contends that creating new merger standards raises unnecessary risks, particularly when the "existing standard accomplishes much of what the Better Deal constructively proposes." In addition, AAI opposes the creation of a new consumer competition advocate to make recommendations to the antitrust agencies, saying that the position "adds a murky layer of oversight."

Senator Orrin Hatch (R-Utah) also has questioned the Better Deal’s antitrust plan to adopt new standards. On the Senate floor, Hatch recently took issue with a departure from the traditional consumer welfare standard of antitrust analysis and the call for a progressive standard advocated by some in academia and the Better Deal. Questioning whether today’s problems require new standards, Hatch said that "the consumer welfare standard, when handled prudently, is a far better steward of our economy than the progressive standard, which is deeply misguided and potentially quite destructive." Hatch instead called on his fellow lawmakers to support antitrust enforcement by taking up the long-delayed nomination of Makan Delrahim and confirm him as the Assistant Attorney General in charge of the Department of Justice Antitrust Division.

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