The Essence of Antitrust: Protecting Consumers and Small Suppliers from Anticompetitive Conduct
46 Pages Posted: 15 Jan 2013 Last revised: 6 May 2013
Date Written: 2013
The goals of antitrust law continue to be debated because there is no single goal that is unambiguously correct. There is one goal, however, that now commands wider support than any other: protecting consumers and small suppliers from anticompetitive conduct – conduct that creates market power, transfers wealth from consumers or small suppliers, and fails to provide them with compensating benefits. This goal is the predominant objective in the legislative histories, it is broadly supported by the American people, it is easier to administer than total welfare, and it is now espoused by the majority of courts.
Proponents of total welfare advance two principal arguments, but neither warrants elevating it over consumer and small supplier protection. First, from a normative perspective, total welfare is arguably the superior goal because it considers the welfare of all participants in the economy, including producers and consumers outside the relevant market. It ignores, however, the transfer of wealth that anticompetitive conduct causes, a transfer that many people regard as exploitative and unfair. Second, from a legal perspective, total welfare is arguably the goal of section 2 of the Sherman Act because it allows a firm to gain monopoly power through superior efficiency. But this safe harbor is equally consistent with a consumer protection goal, since it encourages firms to succeed in the marketplace by providing customers with better products, lower prices, and wider choice.
Keywords: antiturst, competition, goals, consumer welfare, consumer protection, consumer choice, supplier welfare, supplier protection , total welfare, social welfare, economic efficiency
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