I seek to speak the language of competition: The consumer welfare standard, the elaboration principle, and the lexicon of Sherman Act competition

4.09.2024

CeCo EE.UU

Stephen Stasko Stephen Stasko is a clerk for the United States Court of Appeals for the Tenth Circuit, and a former clerk for the United States Court of Federal Claims. Originally from Pittsburgh, Pennsylvania, he graduated magna cum laude from Wake Forest University with a Bachelor of Arts in English and History and cum laude from the George Washington University Law School with a juris doctor. During law school, Stephen worked for the United States Senate Permanent Subcommittee on Investigations, the United States Senate Committee on the Judiciary, the law firm Bowles Rice, and the National Labor Relations Board. He was also research assistant for Professor and former Chairman of the Federal Trade Commission William Kovacic, and covered the Supreme Court for CQ Press.

Abstract: Antitrust’s consumer welfare standard is in a period of sustained criticism yet also continued relevance. The newly-installed Neo-Brandeisian enforcers, no fans of the consumer welfare standard if one believes their rhetoric, have not been shy about pursuing consumer-oriented theories of antitrust harm when bringing cases, as they did recently in blocking the proposed merger between Spirit Airlines and JetBlue Airways. Indeed, the Department of Justice has peddled its more innovative labor-side antitrust cases as mere inversions of classic consumer-side per se offenses. They have also argued that even these labor-side antitrust cases help consumers. Their continued use of consumer-focused language despite the Neo-Brandeisians’ anti-consumer welfare standard rhetoric suggests that, while the consumer welfare standard is widely influential, its ubiquity has created a mistaken impression of its actual utility to lawyers and judges in antitrust cases. Portraying the various suggested standards in contrast to each other diminishes their function in meeting the antitrust laws’ evidentiary requirements. Even the terms “consumer welfare standard” and “citizen welfare standard” suggest a doctrinal feature of the antitrust statutes rather than an elaboration of their text.

Both the consumer welfare standard and its oppositional progeny are best understood as elaborations on the palpable yet broad goal discernable from the text of the Sherman Antitrust Act: competition itself. Though there is obvious acrimony between those who favor the consumer welfare standard and those who urge adoption of an alternative, they agree about the indisputable objectives of the statute: facilitation of competition and prevention of monopoly. The Sherman Act’s text makes these goals perfectly clear. While these broad goals are easy to describe in the abstract, application in individual cases requires explanation and elaboration to describe and charge actions that harm competition and encourage monopoly. The purpose of the consumer welfare standard and any of its supposed alternatives is to elaborate on these goals effectively, and to give judges and lawyers the proper language to discuss competition and potential harms.

This paper argues that the debate over the appropriate welfare standard for antitrust has obscured this purpose, and that antitrust law has either not articulated or not emphasized this doctrinal feature of antitrust law with sufficient clarity. The consumer welfare standard’s explanation of competition is how judges understand the term in Sherman Act cases, and how practitioners explain the concept. Given this entrenched incumbency, any proposed alternative must supplement the consumer welfare standard rather than replace it.

«If antitrust has an epic poem and folklore, it must have language and dialect through which its actors must understand and describe the Sherman Act’s central goal of competition. Indeed, enforcers must elaborate on competition to even describe anti-competitive harm. The consumer welfare standard is the dialect with which most antitrust lawyers explain competition and, hence the dialect with which most judges write about it».