Congress, the courts and the people cannot engage with language that is accessible by a small segment of the population. It is not our role to micromanage corporate decision making under elaborate consent decrees. DOJ Antitrust Nominee Jonathan Kanter Faces Senators On Big Tech [10] Brooke Grp. Even as our economy undergoes revolutionary change, over-reliance on settlement would leave us governed by yesterdays law. The following is a transcript of the event. DOJ will focus on protecting competition as opposed to consumer welfare; . Secure .gov websites use HTTPS Why or why not? Lim advocates for compliance by design: firms should create algorithms that dont collude on price, comply with reporting their algorithms transparently, and know that they will be held responsible for the actions the algorithm takes. Instead, however, for years scholars and pundits have expended enormous energy debating the meaning of words that do not appear in the statute: the ephemeral consumer welfare standard.[4] By my count, 831 academic articles have been written invoking the consumer welfare standard, with more than 200 since 2020. Focusing on competition and the competitive process and its myriad attendant benefits makes it easier to empower Americans to understand antitrust policy and participate in its development. 202-514-2007, Department of Justice Main Switchboard Consumer welfare standard - Wikipedia Judge Posner was saying the quiet part out loud. But ultimately, our point of view that competition is the best way to ensure that those benefits reach the public. While current application of the standard is often imperfect, his proposed replacement is conclusory and unhelpful. Engrsv. United States, 435 U.S. 679, 695 (1978) (Sherman Act reflects legislative judgment that competition is the best method of allocating resources), Gordonv. N.Y. Stock Exch., Inc., 422 U.S. 659, 689 (1975) (sole aim of antitrust is to protect competition), United Statesv. Topco Assocs., Inc., 405 U.S. 596, 610 (1972) (freedom guaranteed by antitrust is the freedom to compete), FTCv. Proctor & Gamble Co., 386 U.S. 568, 580 (efficiencies are no defense to anticompetitive merger because Congress struck the balance in favor of protecting competition), United Statesv. Vons Grocery Co., 384 U.S. 270, 27477 (1966) (purpose of antitrust laws is to prevent economic concentration and protect competition), United Statesv. Phila. Consumer Welfare Standard & Big Tech. Weve now woken up 40 years later, and we have farmers who are unhappy, small businesses who are unhappy, theres concern about platforms that control the flow of information indemocratic society. Weve updated our leniency policy and our approach to criminal enforcement to reflect those priorities. The overarching problem, however, is that it does not reflect the law as passed by Congress and interpreted by the courts. [25]SeeRobert H. Bork,Legislative Intent and the Policy of the Sherman Act, J. Kanter is no stranger to the antitrust agency. Ironically, this sharply contradicts the intent of Judge Bork, when he argued that even if some members of Congress intended to promote a broad range of values through the antitrust laws, we should focus on price and output effects because it makes antitrust easier to administer. Do Consumers Still Reign Supreme in the Antitrust Hierarchy? How In his interview with ProMarket, Kanter explained why he believes that the doctrine that has prevailed over American antitrust enforcement in the past 40 years has failed, why its necessary to broaden the debate over antitrust policy and make it less exclusionary, and why hes not afraid to go after tough cases, including criminal investigations. For more than a century, Congress has recognized this. Our duty is to litigate, not settle, said Kanter, who later on clarified his intention when he declared, We are not part ofthe Chickenshit Club, a reference to journalist Jesse Eisingers book of the same name. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. Another example is the refusal to deal paradigm set forth in Trinko and Aspen. Protecting competition and the competitive process is about ensuring people have the power to choose between alternatives. . They are focused on competition and the competitive process with a range of benefits to consumers, workers, resiliency, and our democracy. [11] We need to think about whether an assumption of general implausibility still holds in modern markets when companies often prioritize long-term growth of share price over short-term profitability. [25]We have seen first-hand, however, how unwieldy and difficult to administer attempting to calculate those effects can be. " which you probably like even less and the consumer welfare standard that has evolved over time and that those of us in the 1980s at the Antitrust Division helped usher in. Ata certain pointin antitrust, and in every area of lawwe must exercise judgment. You cannot have choice without choices. Law360 (May 19, 2022, 9:24 PM EDT) -- U.S. Department of Justice antitrust chief Jonathan Kanter delivered his sharpest critique to date of the dominant standard enforcers and courts use to. In my view, we are living through the error costs of underenforcement, and we owe it to our future to learn from those mistakes and take action to correct our path. Natl Bank, 374 U.S. at 362-63. More from Jarod Facundo Jonathan S. Kanter | The Federalist Society How to balance the consumer welfare standard's focus on objective consumer price analytics with a monopsony standard, which the Agencies specifically mentioned in connection with reviewing the . Opponents of the Biden approach are particularly protective of what's known as the "consumer welfare standard" a 40-year-old rule that says government can use antitrust law only to. The competition crisis we find ourselves in threatens our democracy and our economic liberty at the same time that it has profoundly negative effects on individual consumers. . And, inevitably, an economy built on the fragile foundations of oligopoly and monopoly will leave us more vulnerable. L. Rev. [2] Standard Oil Co.v. FTC, 340 U.S. 231, 248 (1951). I want to use my time this evening to discuss the first pillar in greater depth recognizing that the goal of antitrust law is to protect competition. President Biden Names Jonathan Kanter to Lead DOJ Antitrust Division The Biden administration has made aggressive antitrust enforcement a priority, and appointed Jonathan Kanter to be the nation's chief antitrust law enforc . It makes it easier to address market realities. These five pillars, which are by no means exhaustive, focus on enforcing the laws we already have as Congress wrote them and as courts have interpreted them for decades. Its difficult to engage in self-reflection. Should antitrust laws be used to strengthen labor rights? A locked padlock There are many strong teams duking it out to win.[23]. Washington DC 20530, Office of Public Affairs Direct Line Also lest there be no ambiguity we will continue to challenge deals that present unacceptable risk to the American public. Ignoring the many goals and benefits of antitrust law systematically biases antitrust toward underenforcement. [5]Competitively healthy markets offer more economic opportunity and less risk of corporate power dominating our democratic and social wellbeing. Q: Before your keynote address, we had a session on academic capture and Tommaso Valletti said when he was the chief economist for DG Comp, he observed two kinds of economists: economists who were somewhat naive and liked to play intellectual games, not noticing theyre being used by corporations. That will often mean focusing first on the facts when we examine competitive realities, as opposed to beginning with assumptions embedded in out of date models or cases. The first step is recognizing that the antitrust laws are not narrowly focused. And if we agree that its important, then we all have a role to play in achieving that mission, just as we all could have a role to play in destroying it. Ry. Just as our economy evolves, so must the tools that we use to understand it. By ignoring the consumer welfare standard in favor of undefined "market realities," Mr. Kanter appears to want to abandon the need to show evidence of competitive harm. Together, these pillars will strengthen civil antitrust enforcement so it works for the 21st century. There was a desire to make sure that we were not creating monarchies over our everyday lives through large corporations. Or that establishment and maintenance of monopoly power are consistent with antitrust law? 2461 (1890) (Statement of Sen. John Sherman) ([Trusts] operate with a double-edged sword. Its true for lawyers, for lobbyists, for technologistseverybodys associated with something. Third, adapt antitrust to address market realities rather than relying on static models and assumptions. Antitrust enforcers must also consider whether there is a procompetitive justification for the business conduct in question, and whether the conduct results in countervailing benefits to consumers and competition. He teaches courses on Regulation, Corporate Reputation and Communication at the Booth school at University of Chicago, in Tel Aviv University and I.D.C in Israel. Official websites use .gov I hope an honest, open, direct conversation will generate respect. Congress was right to set competition and the competitive process as our North Star. Were going to stick with it, were going to enforce the law to the fullest extent possible, and I think its important that people understand that. Prior to joining the Stigler center, he worked for the Israeli newspaper Haaretz-TheMarker, where he was a senior features writer and still writes as a political columnist. 202-514-2000. Second, empower people to participate in the development of antitrust policy by changing the language of antitrust so it is accessible and understandable. How else can one rationalize a theory that monopolies and competition can coexist? These assertions are misguided and misleading. [24]The key is making sure we exercise that judgment in a way that is reliable, administrable, and consistent with the statutes we enforce. [8]Reiter, 442 U.S. at 33738 (emphasis added) (quotingMandeville Island Farms v. Am. The Stigler Center for the Study of the Economy and the State hosted its annual antitrust and competition conference in late April. New Merger Guidelines Should Keep the Consumer Welfare Standard (PDF) The Behavioral Activation for Depression Scale (BADS Uncertainty Surrounding Merger Remedies On Mr. Kanter's watch, the agency has also altered its approach to remedies in ways that increase the agency's discretion. Maurice Stucke explains three policy approaches to algorithmic collusion and discrimination, and makes the case for a broader ecosystem approach that addresses not only the shortcomings of current antitrust law and merger review, but extends beyond them for a comprehensive policy response to the many risks associated with artificial intelligence. RESPONSE: Antitrust enforcement is essential to promoting a healthy, competitive economy, which can lead to a wide range of benefits, including better wages, benefits, and other terms of employment for workers. Even if we can confidently measure something, it may not ultimately matter. Antitrust. We need to bring cases to enable the courts to wrestle with the realities of todays markets and ensure antitrust law is fit for purpose in the modern economy. 2023 Antitrust and Competition Conference - Beyond the Consumer Welfare The Stigler Center for the Study of the Economy and the State hosted with the Rustandy Center for Social Sector Innovation, in partnership with the Financial Times, a virtual event discussing shareholder democracy with Lisa Fairfax, Alex Thaler and Luigi Zingales. They want to replace that standard with a list of rules of fair play among firms. Fourth, revive enforcement of Section 2 of the Sherman Act. What has happened in recent years is an increasing number of people have had negative experiences with monopolies across a broad range of issues. But my emphasis on litigation is not just about institutional competence. In new research, Rustam Jamilov shows how decreasing trust in the U.S. institutions has reduced the ability of the Federal Reserve to influence the economy in states that exhibit lower levels of trust. 1994) (The Supreme Court has emphasized, however, that overall consumer preferences in setting output and prices is more important than higher prices and lower output,per se, in determining whether there has been an injury to competition.). Jonathan Kanter, Assistant Attorney General for the Department of Justice Antitrust Division, recently gave a speech condemning the use of the consumer welfare standard in antitrust cases. 28, 2017), https://www.youtube.com/watch?v=JRCm_gJ2EOk. The following is a transcript of the Judges Frank Easterbrook and Diane Wood's keynote conversation with Stigler Center Fellow Filippo Lancieri. Im sure they can take it. The second Affiliate Fellows cohort at the Stigler Center at Chicago Booth is a multidisciplinary group of economists, business scholars, lawyers, and political scientists. Jonathan Kanter, have made it a high priority to eliminate the consumer welfare standard that the Supreme . There are more examples than I have time to go through today. The consumer welfare standard protects the competitive process, not individual competitors in a marketplace from being beaten by rival firms. In order to learn more about Kanters vision for the future of US antitrust enforcement, we sat down with him for an interview. From my experiences, people tend to believe in antitrust enforcement when a monopoly has a negative effect on theirlives. Ltd.v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993). We need to make sure we understand the motivations of the people who are speaking out, and we need to understand our goals: what is it were trying to achieve through antitrust enforcement? President Biden Names Jonathan Kanter To Lead DOJ - Welcome to Mondaq Ltd.v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 223, 227 (1993); see also Matsushita Elec. The courts have recognized this. 3, Intl Bhd. They are travelers who cannot afford a plane ticket home to visit family, or consumers who have little choice in who extracts and exploits their data. I think we all have to look in the mirror andunderstand what it is were trying to achieve and why. Second, change the language of antitrust so it empowers all Americans to participate. Over time, antitrust enforcement turned into a mathematical exercise focused on measuring welfare tradeoffs rather than trusting in the benefits of competition. A variety of sometimes-conflicting approaches using the label consumer welfare standard have become a distraction. President Joe Biden has nominated antitrust attorney Jonathan Kanter to lead the Department of Justices Antitrust Division. Roughly, I think the new era coincides with the 1980s, when there was an effort to infuse new ideas to shift the law in a new direction and create a world in which there was significant deference to the decisions of businesses. Kanter and Khan Antitrust Crusade Riddled with Conflicts of Interest Delegates from the ICN's member jurisdictions included agency leadership and staff, competition experts from international . [19]Hearing on Reviving Competition, Part 3: Strengthening the Laws to Address Monopoly Power, Before the H. Subcomm. We can also use real-world evidence, economics, expertise, and common sense to determine whether conduct harms competition. Ry. Our markets are suffering from a lack of resiliency. Enforcers attacked companies purely for their size while ignoringbenefits they delivered to American shoppers. Brian Pandya et al., " Nomination of DOJ Antitrust Head Signals New Era in Antitrust Enforcement ," Westlaw Today, Aug. 17, 2021. US Antitrust Division Announces Shift in - Greenberg Traurig LLP Jonathan Kanter has made it his mission to undermine decades of well-accepted legal theory, including the longstanding "consumer welfare standard," meant to keep American consumers safe from shady business tactics.And instead of properly examining and investigating real monopolies, like the hospital monopolies created because of bad government policy, Kanter, a longtime K Street lawyer who . Academia has always been perceived by the outside as pristine, and I think its important to have an honest conversation about what it is and what it isnt. Hours after the confirmation vote, Biden elevated Khan to FTC Chair, blindsiding Republicans. When I when I talk about big companies, its important to remember that they call it antitrust for a reasonthe trusts were the biggest companies in the world, the ones with the size and significance of a government. Office of Public Affairs | Assistant Attorney General Jonathan Kanter [2]In my remarks, I briefly outlined five key principles necessary to restore a competitive, resilient and dynamic American economy. 2003) demonstrates, a business that uses a product as an input to create another product or service is a consumer of that input for antitrust purposes and can allege antitrust injury.). That first conference asked an important question: Is There a Concentration Problem in America? In retrospect, that particular conference functioned as a critical inflection point in the conversation regarding corporate concentration and the state of antitrust enforcement a conversation that we are still having today, but against the backdrop of a dramatically different enforcement and political environment. [10], The Clayton Act is even more explicit. All of this is fine as an intellectual exercise, but there is just one problem the phrase consumer welfare standard does not appear in any statute, legislative history, or common-law precedents. A lock ( The digital revolution has brought about change in our economy rivaling, if not exceeding, that of the Industrial Revolution. It means hollowed-out markets susceptible to failure when supply shocks upset delicate systems. It can often mean that you have to sometimes say youre wrong about some things. Antitrust Enforcement: The Road to Recovery. Borks selective reading of the legislative history to divine a consumer welfare standard has been widely criticized. It is time we make the antitrust laws work for our modern economy, our society, and our fellow citizens. Agency,Supply Chain Resilience Guide(Apr. We hear a lot about BigTech, we hear a lot about BigHealth Care. Everything can be dangerous if you use it the wrong way. Assistant Attorney General Jonathan Kanter of the Antitrust Division led the Department of Justice's delegation at the International Competition Network's (ICN) 21st annual conference, hosted by the German Bundeskartellamt in Berlin, Germany, on May 4-6. The Supreme Court describes antitrust law the same way. Assistant Attorney General Jonathan Kanter Delivers Keynote Address at the Brookings Institution's Center on Regulation and Markets Event "Promoting Competition in Banking" . We must challenge conduct that suppresses or destroys competition. However, the appointment of Lina Khan as FTC chair in March 2021 threatens to upend this bedrock principle. This neutral application of antitrust law fosters the robust competition that delivers better prices and better choices for all Americans. Yet somewhere along the way, the antitrust community lost its North Star. Theres nothing wrong with being an advocate, but theres a difference between an expert and anadvocate.
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