Herbert Hovenkamp, Dec 20, 2013
Whether antitrust policy should pursue a goal of “general welfare” or “consumer welfare” has been debated for decades. The academic debate is much more varied than the case law, however, which has consistently adopted consumer welfare as a goal.
While some practices such as mergers might produce greater gains in productive efficiency than losses in consumer welfare, identifying such situations would be extraordinarily difficult. First, these efficiencies would have to be “transaction specific,” meaning that they could not be attained by other means. Second, these would necessarily be gains that accrue at lower output levels than previous to the practice; otherwise there would be no consumer harm to balance. But most efficiency gains accrue at higher rather than lower output levels. Third, collusion facilitating practices spread welfare losses across an entire industry, while production gains typically accrue only to the participants in a merger or similar practice. Fourth, the reigning tradeoff models generally assume a market that was competitive prior to the practice and monopolized after. Most practices that facilitate the exercise of market power occur in markets that were noncompetitive to begin with. In these situations consumer losses are relatively larger and producer gains smaller…
Links to Full Content
Featured News
Plaintiffs Seek Communications In Antitrust Case Against Pioneer
May 9, 2024 by
CPI
UK Government Approves Vodafone-Hutchison Merger
May 9, 2024 by
CPI
Senate Majority Leader Announces Plan for AI Regulation Framework
May 9, 2024 by
CPI
BBVA Initiates Aggressive Takeover Bid for Sabadell
May 9, 2024 by
CPI
TikTok to Label AI-Generated Content Amid Election Interference Concerns
May 9, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Ecosystems
May 9, 2024 by
CPI
Mapping Antitrust onto Digital Ecosystems
May 9, 2024 by
CPI
Ecosystems and Competition Law: A Law and Political Economy Approach
May 9, 2024 by
CPI
Ecosystem Theories of Harm: What is Beyond the Buzzword?
May 9, 2024 by
CPI
Open Ecosystems: Benefits, Challenges, and Implications for Antitrust
May 9, 2024 by
CPI