Political commentator Matthew Yglesias has voiced concerns regarding the evolving landscape of antitrust enforcement in the United States, suggesting it is being utilized to introduce "crank ideas" that obscure the true nature of economic policy debates. In a recent tweet, Yglesias stated, > "Antitrust enforcement is an important aspect of economic policy that is increasingly being used to smuggle in a lot of crank ideas in a way that is confusing casuals about what is really being debated." His remarks highlight a growing debate over the foundational principles guiding competition policy.
Yglesias's critique stems from a perceived departure from the long-standing "consumer welfare standard," which has traditionally governed U.S. antitrust law for over four decades. This standard primarily focuses on whether business practices or mergers lead to higher prices, reduced output, or stifled innovation for consumers. Proponents of this approach argue it provides a measurable and objective basis for antitrust enforcement, rooted in economic analysis.
However, the Biden administration, under the leadership of Federal Trade Commission (FTC) Chair Lina Khan, has signaled a significant shift. Khan, a prominent critic of the consumer welfare standard, advocates for a broader interpretation of antitrust law that considers harms beyond immediate consumer prices. This expanded view encompasses issues such as impacts on workers, small businesses, market power, and overall economic inequality, moving beyond a sole focus on efficiency and consumer cost.
This new approach, often termed "New Brandeisian" antitrust, aims to address perceived failures of the consumer welfare standard in curbing corporate concentration and its broader societal implications. While supporters argue it is necessary to confront modern market realities and systemic issues, critics like Yglesias contend that it introduces subjective and potentially inconsistent criteria into enforcement, risking political intervention and stifling innovation by moving away from clear economic metrics. The ongoing debate reflects fundamental disagreements about the purpose and scope of government intervention in competitive markets.