The Superiority of the Consumer Welfare Standard
Abstract
Why did antitrust law in most jurisdictions adopt the consumer welfare standard (CWS)? A popular explanation, which we term the Critical Political Economy Theory of Antitrust (CPETA) pretends that the CWS reflects the triumph of conservative, anti-enforcement, and free-market ideology. The CPETA asserts that neoliberals like Robert Bork and his acolytes cajoled US courts into believing that antitrust law application required a narrow focus on economic evidence of consumer harm. By limiting the universe of injuries cognizable under antitrust law and raising plaintiffs’ burden of proof, the CWS achieved the neoliberals’ intended purpose: to enucleate antitrust law of any social and political relevance. This ‘minimalist’ version of antitrust law was subsequently globalized as part of the standard neoliberal ideological package, under the auspices of US hegemony.
The CPETA is a fable. First, the CWS is not a “plant” of Robert Bork and the Chicago School. Antitrust history shows footprints of a CWS as far back as the common law of the seventeenth century, in the first cases of the US Supreme Court, and antitrust legislation in the US and the EU decades before the ascent of neoliberalism. Second, the proposition that the CWS is slanted against antitrust enforcement cannot be reconciled with many demonstrable instances in which the CWS leads to more antitrust law intervention, not less. In fact, proponents of more antitrust enforcement in the 1980s favored the CWS over more “laissez-faire” alternatives.
What explains the success of the CWS is a more mundane, practical need for endowing real-life cases with the weight of empirical evidence. By adding an evidential filter, the CWS makes sense of an absurdly vast statute that could, on its face, condemn everything from law firm partnerships to wedding contracts. We conclude that CWS is a judicial interest in the truth about market competition, not a socially constructed power structure propelled by the skullduggery of a neoliberal cabal. The former explains the emergence and endurance of the CWS in US antitrust law. This view further suggests that it would have been plausible for antitrust law to orient itself towards a CWS without Robert Bork.