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The Consumer Welfare Standard Should Remain America’s Antitrust Standard


By Trey Price, American Consumer Institute

The current Federal Trade Commission (FTC) and the Department of Justice (DOJ) have seen lower success rates than during previous administrations. The reason behind this decline is that both agencies have taken a more hostile approach to mergers and increasingly rely on untested legal theories in court. Continuing down this path will, at best, waste precious agency resources as the agencies pursue cases likely to fail. At worst, it could result in a new precedent that will lead to higher prices for consumers.

This change in direction is the result of a conscious decision to move away from the consumer welfare standard (CWS) that has served as the nation’s antitrust enforcement mechanism for decades. The CWS was introduced to create an objective measure by which to judge antitrust cases. It does so by evaluating whether the merger will likely harm consumers through factors such as increased prices or decline in innovation or output.  

The move away from the CWS is the culmination of a debate brought to the mainstream by the current head of the FTC, Lina Khan. In her essay, “Amazon’s Antitrust Paradox,” Khan argues that focusing on consumer welfare through the CWS is too narrow. The FTC and DOJ’s shift, means that mergers previously viewed as perfectly legal, are now seen as problematic.

So far, the results of this policy change have been less than impressive. Rather than spur a golden age of antitrust policy, the FTC and DOJ have experienced an increase in legal defeats as they abandon precedent in favor of questionable new legal theories. Continuing down this course is likely to lead to one of two outcomes. One outcome is that agencies will spend more time and resources on unwinnable court cases, which will only delay mergers and cost taxpayers more money in the process.

The other outcome is that the agencies’ transition away from the CWS will be successful, leaving companies unsure of when mergers or acquisitions will be challenged. In this scenario, regulators would be able to take cases void of consumer harm, that instead target social issues such as low wages or going after a company just because of its size.

For the past forty years the consumer welfare standard has been the primary tool by which courts determine whether a merger is legal or not. Uncoupling consumer welfare from antitrust would expand regulators’ power at the expense of consumers. Antitrust regulators should reconsider their current stance and return to using the CWS as the legal basis for judging mergers.


Trey Price is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.