Who is meant to be protected by antitrust law and policy?

brown wooden tobacco pipe on a white surface

The focus of contemporary competition policy debates is shifting back to first principles, asking: “What are we trying to do? What is the purpose of antitrust?” Enforcers and some lawmakers in the US are advocating a shift away from consumers to a completely different approach that focuses on exercising power over specific companies. This change in approach is also gaining traction in some US states as several state Attorneys General have recently sued technology companies alleging violation of antitrust laws without affecting the actual conduct or proposed remedy. consider consumers. California Attorney General (AG) Rob Bonta recently filed a civil antitrust and unfair competition lawsuit claiming that Amazon’s pricing practices prevent retailers from offering lower prices than those they offer at Amazon’s store. California case mirrors the suit to DC AG Karl Racine filing on behalf of the District of Columbia also alleges that Amazon has too much control over what outside sellers can charge for their products. But, the judgement issued by the DC Superior Court established not only that the DC AG’s office could not support its allegations against Amazon, but that the Amazon practices in question are actually beneficial to consumers. These recent cases raise the important question: who is antitrust protecting?

Over the past four decades, enforcers and courts have agreed that antitrust law and policy should protect the interests of consumers, by promoting competition rather than competitors. Importantly, the consumer interest standard was developed in the 1970s in response to the perception that previous US antitrust policy had become too subjective and aggressive by focusing on the size of companies regardless of the effect on consumers. As enforcers and courts adopted the consumer welfare standard, it has been the backbone of US and global antitrust policy ever since, as demonstrated International Competition Network (ICN) and the Organization for Economic Co-operation and Development (OECD). As a result, the purpose of antitrust law was to ensure economic efficiency, delivering lower prices, promoting innovation, and increasing consumer benefits. For decades, the message has been clear – consumers are the ones to be protected by antitrust efforts. This approach has led to remarkable levels of innovation, and it is no coincidence that many digital and connected services have been able to provide consumers and businesses with the amazing benefits they enjoy today.

Also Read :  Zhaoxin Launches KX-6000G High-Performance & KH-40000 Server CPUs For China's Domestic PC Market

However, recently US antitrust enforcement and even some legislators seem to be turning away from the consumer welfare standard back to a “big is bad” approach that focuses on the size of companies, instead of protecting consumers and welfare remove them. Although Senator Amy Klobuchar recently sue As David and Goliath discuss their fight to pass antitrust legislation to regulate big tech companies, Jonathan Kanter, Assistant Attorney General for the Antitrust Division at the Department of Justice, said, declared that “the era of lax enforcement is over, and a new era of vigorous and effective antitrust law enforcement has begun.” Contrary to the consumer welfare standard that gave a high degree of flexibility and objectivity to the enforcement agencies and the courts, the new proposals including the concepts of fairness, labor rights and sustainability, raise many questions regarding their enforceability, clarity and its subjectivity. . And the increase in the number of state antitrust suits shows a complete lack of focus on consumers. Indeed, the California and DC cases against Amazon appear to run counter to the core objectives of competition and consumer protection.

Also Read :  Starlink ends its unlimited satellite Internet data policy as download speeds keep dropping

The California AG’s legal Amazon claims that Amazon imposes agreements at the retail and wholesale level “that prevented effective price competition across a wide range of markets and online stores” since “competing sites do not offer lower prices as they would in competitive market because Amazon prohibits it by contract.” However, those assertions misunderstand the highly competitive retail industry and do not take into account how Amazon operates. In practice, sellers in the Amazon store set their own prices for the products they offer and are able to offer them even when they are offering lower prices for the same product elsewhere. When sellers set uncompetitive prices, those offers are still available to customers in the Amazon store; however, they won’t appear in Amazon’s “buy box,” which is Amazon’s way of highlighting the products that are better for consumers. Therefore, Amazon offers an additional advantage and service to consumers who know that they will find competitive prices in the Amazon store and, in particular, in the “buy box”. The remedy proposed by the California AG law would force Amazon to pass higher prices to consumers. How is that a consumer friendly idea? Who would defend this antitrust remedy? Not the consumers, who would be paying higher prices.

Also Read :  7 Apple Black Friday deals that deliver great savings on travel tech

The same question was raised in DC’s suit,. which is the DC AG filed in May on behalf of the District of Columbia alleging that Amazon has too much control over what outside sellers can charge for their products. But, the judgement issued by Judge Hiram Puig-Lugo of the District of Columbia Supreme Court established that the DC AG’s office could not support its allegations against Amazon. The Court explained that “based on what the policy says, sellers are allowed to set prices within the market . . . the only limitation is that they cannot set a price that is significantly higher than the prices recently offered on or off Amazon,” which benefits consumers.

These recent state lawsuits seem to go against the core objectives of antitrust law and policy. Do we want to go back and protect competitors? Or just prohibit the practice of certain companies without demonstrable harm to competition? Or to protect other social or policy goals? And is antitrust the right vehicle to protect those? When we think about these basic questions, we should be guided by the The US Supreme Courtwho said that “growth or development led to a better product [or] Business acumen is not a violation of the antitrust laws.” Considering the California and DC lawsuits against Amazon and the recent narrative about the purposes of antitrust moving away from a consumer welfare standard to a “big and bad” approach that focuses on regulating certain companies in consumer protection center, the question remains: who is against trust. supposed to protect?


Leave a Reply

Your email address will not be published.

Related Articles

Back to top button