jonathan kanter consumer welfare standarddivinity 2 respec talents

Notwithstanding the original goals of the law, we saw the emergence of monarchs over the new industries of the digital revolution. 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. Of course, there will always be hard issues and hard cases. However, the appointment of Lina Khan as FTC chair in March 2021 threatens to upend this bedrock principle. With the remainder of my time today, I would like to outline what I see as five pillars of an effective civil antitrust enforcement regime. [24]See United States v. Trenton Potteries Co., 273 U.S. 392, 397 (1927) (Reasonableness is not a concept of definite and unchanging content. Consumer Welfare Standard & Big Tech. Congress determined to preserve our traditionally competitive economy. I think this started five years ago at the Stigler conference. Even if we can confidently measure something, it may not ultimately matter. In order to learn more about Kanters vision for the future of US antitrust enforcement, we sat down with him for an interview. A chorus of leading Democrats immediately praised Kanters nomination. The following is a transcript of the event. of Regents, 468 U.S. at 107 (A restraint that has the effect of reducing the importance of consumer preference in setting price and output is not consistent with this fundamental goal of antitrust law.). 202-514-2000. 710, 72021 (2017); Herbert Hovenkamp, The Antitrust Enterprise: Principle and Execution 3942 (2005). . So we must learn from the current structural failures to guide our approach going forward and prepare for the uncertainty that lies ahead. Q: Doyou consider yourself a new Brandeisian? 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. It is heartwarming to be among so many good friends and colleagues. In his Five Pillar Speech, Kanter identified the five principles of effective antitrust enforcement: Recognizing that the purpose of antitrust law is to protect competition; making the language of antitrust more participatory and inclusive; adapting to market realities, rather than relying on assumptions and static models; reviving enforcement of Section 2 of the Sherman Act, which makes it illegal for any single entity to monopolize, attempt to monopolize, or combine or conspire to monopolize; and enforcing the law through litigation. U.S. Assistant Attorney General Jonathan Kanter highlighted his five policy initiatives for reinvigorating enforcement of U.S. antitrust laws. For too long we have cloaked the antitrust laws in technocratic language. Just as our economy evolves, so must the tools that we use to understand it. Jonathan Kanter, the new head of the Department of Justice's antitrust division, used his keynote speech at the Stigler Center's antitrust conference last week to mark a significant shift in the way the US is enforcing its antitrust laws. Indeed, we are already demonstrating our willingness to block anticompetitive transactions in a broad range of critical industries like airlines and healthcare. That is why it is the first pillar in addressing the competition crisis. 2461 (1890) (Statement of Sen. John Sherman) ([Trusts] operate with a double-edged sword. of Regents of the Univ. So do other forms of expertise. The challenge before us is to engage in sound reasoning at the same time that we reengage the public with critical decisions that impact the structure of their economy. Or that establishment and maintenance of monopoly power are consistent with antitrust law? In them, Kanter wrote that he had previously "voiced concerns that the application of the consumer welfare standard has been inconsistent, vague, and insufficient to keep pace with market. They are focused on competition and the competitive process with a range of benefits to consumers, workers, resiliency, and our democracy. A .gov website belongs to an official government organization in the United States. It is the fifth pillar that garnered the most attention and signaled the most meaningful shift. When we issue guidelines and speak only of small but significant non-transitory increases in price, or of how vertical effects derive from the elimination of double marginalization, we exclude these people from the antitrust dialogue. 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. Prior to her roles at the University of Chicago she worked as a reporter on the Visual and Data Journalism team at the Financial Times in New York City. In an interview with ProMarket, assistant attorney general Jonathan Kanter, head of the Department of Justices antitrust division, explains why he believes that the doctrine that prevailed over American antitrust enforcement in the past 40 years has failed and why its necessary to broaden the debate over antitrust policy beyond lawyers and economists. He is credited with revolutionizing the Israeli Journalism and media worlds and as bringing dramatic changes to the economic and social discourse in Israel. . Its difficult to engage in self-reflection. As Justice Gorsuch recently explained in NCAA v. Alston, analysis of competitive effects follows market realities, and so [i]f those market realities change, so may the legal analysis. [7] While enforcers and the courts must respect Congress core command that the antitrust laws should be applied to protect competition, how we do that must evolve as competitive realities do.[8]. Competition is the process of rivalry we all see play out in the markets and participate in every single day as buyers, sellers, workers and innovators. Congress prohibited agreements that restrain trade, mergers that substantially lessen competition and conduct that monopolizes markets. There was a desire to make sure that we were not creating monarchies over our everyday lives through large corporations. The legislated goals of the antitrust laws are clear Congress sought to protect competition and the competitive process. By: Einer Elhauge (ProMarket) The head of the Department of Justice's Antitrust Division, Jonathan Kanter, made a recent speech adopting the Neo-Brandiesian position that in antitrust cases the consumer welfare standard should be jettisoned and replaced with a "competition and the competitive process" test. 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. Enforcers attacked companies purely for their size while ignoringbenefits they delivered to American shoppers. Politics DOJ Antitrust Nominee Jonathan Kanter Faces Senators On Big Tech, Consumer Welfare Standard By Allison Schiff Thursday, October 7th, 2021 - 11:12 am If there's one thing lawmakers from both sides of the aisle seem able to agree on, it's the need to rein in Big Tech. on Antitrust, Commercial, and Administrative Law, 117th Cong. Rolnik served for 15 years as Editor-in-Chief of TheMarker and 7 years as the Deputy Publisher of Haaretz daily newspaper - Israel oldest and most important newspaper. We are not completely out of the woods yet though. Both speakers will address important topics at the intersection of labor and antitrust. Most mergers in industries with only a handful of competitors are anticompetitive, so why dont we block them? This neutral application of antitrust law fosters the robust competition that delivers better prices and better choices for all Americans. Focusing on rivalry and competition lets us decide the tough questions in particular cases as markets evolve. But the consequences of our enforcement policy are real and significant, especially at a time of crisis and hardship. . Rather, we preserve competitive markets, which drive innovation. 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. It means hollowed-out markets susceptible to failure when supply shocks upset delicate systems. [6] We have heard in our recent guidelines listening sessions profound examples of how mergers have harmed individual workers and small business owners by establishing bottlenecks that extract the value of their work. The vibrant debate around the consumer welfare standard is an attempt to interpret words that are not in the law. We have a mission, which is to promote competition because its important. ProMarket is dedicated to discussing how competition tends to be subverted by special interests. [13]See, e.g.,Vons Grocery Co., 384 U.S. at 27477. An official website of the United States government. my job is not to please the defense bar. I agree that end consumers are important beneficiaries of antitrust enforcement, but they are not the only beneficiaries. Instead of making judgments easier in hard cases, the consumer welfare standard has often made even the easy cases hard to judge. Cases have become sprawling exercises where companies promise billions in efficiencies and armies of consultants argue over newly-invented and often-untested models that they claim show a transparently problematic merger will benefit consumers. Too often, it leads us to focus on estimating data to the third decimal point for statistical models detached from the competitive realities actually playing out in the markets. Official websites use .gov Antitrust law protects competition and the competitive process in service of both prosperity and freedom. Without the standard in place, antitrust law would revert back to the broken tradition of the mid-20th century. While there are few certainties in todays world, we can rely on a prediction that that the unpredictable will occur. [25]SeeRobert H. Bork,Legislative Intent and the Policy of the Sherman Act, J. 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. Because we lose touch with the people were trying to protect. I think it was it was one of the more important inflection points. You cannot have choice without choices. Assistant Attorney General Jonathan Kanter Delivers Keynote at the University of Chicago Stigler Center, https://www.youtube.com/watch?v=JRCm_gJ2EOk, Assistant Attorney General, Jonathan Kanter. Senator Sherman warned that if the concentrated powers of [a monopoly] are entrusted to a single man, it is a kingly prerogative, inconsistent with our form of government. Yet we now know many such people who enjoy power over key markets. But the path will not be easy or linear. Given this lack of transparency and good faith, no Republican should vote to hand the Biden administration another antitrust victory. Kanter is no stranger to the antitrust agency. But competition is not a switch that we can flip on an off. 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 . Q:Do you recognize a process of self-reflection among economists these days? Instead, the text of the antitrust laws reflects a value judgment by Congress to protect competition. It can often mean that you have to sometimes say youre wrong about some things. It also supports the goal of ensuring the language of antitrust reflects how people think about competition and in ensuring that the law catches up to market realities. It turns out that antitrust was not actually dead. PDF | On Mar 15, 2017, Christian Thorun and others published Indicators of consumer protection and empowerment in the digital world: Results and recommendations of a feasibility study | Find, read . Kurt Davis Jr. argues that the U.S. Congress should consider switching from a federal debt ceiling as a nominal value to one fixed as a percentage of GDP. Kanter has slammed the consumer welfare standard as judicial activism and central planning, and argued that courts should not consider economic efficiency when ruling on antitrust cases. Second, empower people to participate in the development of antitrust policy by changing the language of antitrust so it is accessible and understandable. Jonathan Kanter, nominated to lead the DOJ's Antitrust Division, has long advocated for more aggressive antitrust enforcement against large technology companies. Q: What in your view were the ramifications, or the price, of the past 40 years of antitrust? Jonathan Kanter, the new head of the Department of Justices antitrust division, used his keynote speech at the Stigler Centers antitrust conference last week to mark a significant shift in the way the US is enforcing its antitrust laws. When consumer is narrowly defined or read into the statute, antitrust is blind to real problems it was meant to prevent. The approach that Ive been trying to advocate for is one thats really more faithful to the language of the antitrust laws, which is to value competition. Professor Handler wrote at the centennial of the Sherman Act in 1990 that the combination of a policy of minimal antitrust enforcement and the glorification of efficiency have reduced antitrust to [a] parlous condition.[16]He wrote that the Sherman Act had been previously understood as a charter of freedom and the economic equivalent of the Bill of Rights, and urged the restoration of vigorous enforcement vital for the preservation of the free enterprise system.[17]Professor Handler reflected an academic perspective that was once well understood but somehow has been forgotten. These assertions are misguided and misleading. She specializes in communicating research, data and financial and economic concepts to a variety of audiences. An official website of the United States government. Sen. Elizabeth Warren (D-Mass.) Even as our economy undergoes revolutionary change, over-reliance on settlement would leave us governed by yesterdays law. Office of Public Affairs 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. Antitrust law is about so much more. It is time we get back to first principles and focus on the policies that Congress was trying to advance in passing the antitrust laws. [4] See, e.g., Symposium, The Goals of Antitrust, 81 Fordham L. Rev. A locked padlock .);see also Bd. As one of my predecessors explained, some deals should never leave the boardroom. In the session about academic capture, Vallettian economistsaid economics can be dangerous for policymaking because it can create uncertainty and self-doubt. Third, adapt antitrust to address market realities rather than relying on static models and assumptions. A growing body of evidence suggests that above-cost pricing strategies can in fact be a rational strategy for anticompetitive exclusion, particularly in modern digital markets. [8] State Oil Co.v. Khan, 522 U.S. 3, 20 (1997). 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. 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. So, it is fitting for me to close by sayingit is time we rejoin them and recognize that the goal of antitrust law is to protect competition and the competitive process. It makes it easier to address market realities. Rec. I think the price of the last 40 years was that we lost the opportunity to develop a dialogue with the public. .);Brown Shoev. United States, 370 U.S. 294, 31523 (1962) (Celler-Kefauver Acts dominant theme to combat rising tide of economic concentration through competition);N. Pac. The fifth pillar of my plan is to faithfully discharge the divisions affirmative duty to prevent and restrain antitrust violations. Our view of what is a reasonable restraint of commerce is controlled by the recognized purpose of the Sherman Law itself.). Natl Bank, 374 U.S. at 368. That is how the antitrust laws simultaneously serve prosperity and freedom and all their many values by preserving economic liberty and letting competition operate to organize our economy. The Future of Antitrust: Is the Consumer Welfare Standard Still Up to the Task or Is It Time for a 'Better Deal'? 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. Lina Khan was confirmed last month in a 69-28 vote, with 21 Republican Senators voting in favor of her confirmation. The problem is that standards about measuring welfare tradeoffs turn antitrust into a narrow technical exercise that overlooks the realities of our economy. Even divestitures may not fully preserve competition across all its dimensions in dynamic markets. We must invest in competition for the long term. Share sensitive information only on official, secure websites. 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. of Tradev. United States, 246 U.S. 231, 238 (1918) (restraints legal if they regulat[e] or promote[] competition but illegal if they suppress or destroy it). Because competition is dynamic. Competition and uncertainty go hand in hand, as firms uncertain of where or how rivalry will emerge will continuously improve their own products and services to stay ahead of the next evolution. 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. There is an old saying about innovation, often attributed to Henry Ford, that if Ford had asked customers what they wanted, they would have said a faster horse. 21, 2022), https://www.justice.gov/opa/speech/assistant-attorney-general-jonathan-. The antitrust bar is not our client, and we cannot make decisions in the best interest of the antitrust bar. | Find, read and . Delegates from the ICN's member jurisdictions included agency leadership and staff, competition experts from international . That pillar is first in the list because we have to understand our North Star. [25]We have seen first-hand, however, how unwieldy and difficult to administer attempting to calculate those effects can be. Khans confirmation was an unprecedented bait-and-switch operation. Antitrust Division Updated April 4, 2022. Workers get lower wages. of Elec. What I take issue with is when theres a sense of purity thats being put forward, but the motivations are not pure. It cannot be that a business trying to understand the legality of its merger must undertake months of analysis to produce a complex simulation model, or that a court must decide an antitrust case by deciding among dueling consultants white papers reporting on simulations. He previously hosted The Cost of Doing Business, a twice-weekly podcast about business and economics in Israel. We recently published an updated leniency policy and extended FAQ that reflect this focus on accessibility. It is the academic gift that keeps on giving. The idea of the central planning standard is that antitrust enforcers or defendants must model and compute the welfare impacts of a specific merger, or of particular conduct under the rule of reason. of Regents of Univ. Philosopher-king judges handed down incoherent rulings designed to punish political enemies or reward political allies. Crystal Sugar Co., 334 U.S. 219, 236 (1948));see also PLS.Com, LLC v. Natl Assn of Realtors, 32 F.4th 824 (9th Cir. It is a good standard that leads us to ask the right questions in particular cases. I look forward to the work ahead. The fix is to use a structural presumption to lower the burden for regulators. But again, my job is not to please the defense bar. Lawyers have been a bigger problem than economists. On July 20, 2021, President Biden nominated Jonathan Kanter, a longtime advocate for more aggressive antitrust enforcement against large technology companies, to lead the Department of Justice's Antitrust Division. After all, words like competition and competitive are part of our everyday vocabulary. They increase beyond reason the cost of the necessaries of life and business, and they decrease the cost of the raw material, the farm products of the country.). When we fail, families struggle to afford groceries. . Share sensitive information only on official, secure websites. Brooke Fox is the Managing Editor of the political economy publication, ProMarket, at the Stigler Center for the Study of the Economy and the State at the University of Chicago Booth School of Business and a lecturer at the Harris School of Public Policy. We will rebuild our economy, in time, on the solid foundation of competition. This applies to anticompetitive conduct, including monopolization. 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. Second, change the language of antitrust so it empowers all Americans to participate. What happened that brought people like you and Lina Khan and Tim Wu to such important regulatory positions? Its meaning necessarily varies in the different fields of the law, because it is used as a convenient summary of the dominant considerations which control in the application of legal doctrines. Together, these pillars will strengthen civil antitrust enforcement so it works for the 21st century. 950 Pennsylvania Avenue, NW 7, 10 (1966); Robert H. Bork,The Rule of Reason and the Per Se Concept: Price Fixing and Market Division, 74 Yale L.J. And I am here to declare that the era of lax enforcement is over, and the new era of vigorous and effective antitrust law enforcement has begun. It is no secret that many settlements fail to preserve competition. Was the provocation intentional? [2]In my remarks, I briefly outlined five key principles necessary to restore a competitive, resilient and dynamic American economy. Daryl Lim explains that while there is some evidence that pricing algorithms facilitate collusion, there are reasons to be skeptical of their effectiveness. A variety of sometimes-conflicting approaches using the label consumer welfare standard have become a distraction. U.S. Department of Justice of Elec. The history of the Sherman and Clayton Acts show a profound concern with economic liberty, not merely as an economic concept, but as a concept connected to the freedom of our nation. 2022) (Unfair trade practices. In the context of U.S. competition law, the consumer welfare standard (CWS) or consumer welfare principle (CWP) [1] is a legal doctrine used to determine the applicability of antitrust enforcement. A lock ( I think there are many economists who have a broader view of the economy and the importance of competition and have articulated very clearly and articulately why we need more competition, and I celebrate thatI think theres an important role for that. [7] NCAA v. Alston, 141 S. Ct. 2141, 2158 (2021). v. Indiana Fedn of Dentists, 476 U.S. 447, 459 (1986) (limiting consumer choice by impeding the ordinary give and take of the market place cannot be sustained under the Rule of Reason (internal citation omitted));Bd. Do you think that academic capture contributed to what happened to antitrust in the last 40 years? We also need to take more seriously courses of conduct that maintain monopolies. Some of those were your colleagues, friends, and adversaries in the last 20 years. 3, Intl Bhd. Yet Trinko relies on basic understandings about how networks are built and whose investment incentives are most important. Competition starts with rivalry. What Can Policymakers Do About Algorithmic Collusion and Discrimination? And when we have evidence that a defendant has violated the law, we will litigate to remedy the entire harm to competition. People who know me well understand that this has been my philosophy for some time now. It will also mean reassessing whether precedents are outdated because they reflect embedded assumptions about how markets work that no longer hold true. Congress has chosen the values we are to preserve, and it has squarely settled on upholding a competitive process in free markets. The fourth pillar of my plan is to vigorously enforce Section 2 of the Sherman Act. But we can promote them the way Congress intended by protecting competition and the competitive process. . 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. Rolnik is the recipient (2013) of the Sokolov (Israeli Pulitzer) life-time-achievement award for excellence in Journalism. Component . Third, continually adapt antitrust to address todays market realities. Theres a role for expertise in antitrust enforcement. 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? For more information, please visit ProMarket Policy. We need to update our tools to meet the facts, not try to contort the facts to fit out of date tools. We usually cannot measure and quantify all of those values. We must vigorously enforce the Sherman Act to prevent the unlawful acquisition, maintenance and extension of monopoly power. . The consumer welfare standard protects the competitive process, not individual competitors in a marketplace from being beaten by rival firms. Office of Public Affairs U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington DC 20530. It therefore proscribed anticompetitive mergers, the benign and the malignant alike, fully aware, we must assume, that some price might have to be paid.[22]. We must challenge conduct that suppresses or destroys competition. Full stop.. 3. Senator Sherman wrote the antitrust laws as a prescription. Across the economy, businesses are harvesting more data, gatekeepers are growing in strength and automated decision-making is changing business paradigms. Co. v. United States, 356 U.S. 1, 4 (1958);NCAA v. Bd. Exercising judgment in hard cases is an unavoidable part of law. It is charging lower prices so customers buy your goods instead of a rivals or paying higher salaries so you attract talent away from a competitor. But our use of the term in the antitrust context has not been so limited. We cannot just summon competition during a crisis. [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.

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