Should Antitrust Pursue Multiple Policy Goals?

Some scholars argue that antitrust should abandon the consumer welfare standard and adopt a “welfare dashboard” that considers not just competition, but all social values that antitrust could possibly influence, including democracy, inequality, and small business protection. Recently, some advocates of this approach have argued that it is firmly grounded in modern economics. As we explain, the opposite is true. Economic policy research virtually never employs broad welfare frameworks like this because they are unworkable. Among other problems, resolving tradeoffs between diverse phenomena like competition and democracy requires assigning them “welfare weights” that no one knows how to specify. The sheer impracticality of this approach means that it inevitably collapses into subjective speculation.

While consumer welfare has well-known limitations, most of them are minor in single-market antitrust analysis, and those that remain can be addressed using better methods to measure welfare. A key benefit of consumer welfare is that it provides a sensible means of aggregating the different variables associated with competition (e.g. price and quality) using observable data, without requiring subjective welfare weights. In antitrust’s adversarial system, this provides a shared normative framework for resolving policy disagreements objectively. By contrast, a dashboard allows each side to assert different (often incommensurable) normative values with no way to resolve the conflict.

Read at SSRN.