Monday, January 31, 2022

Consumer Welfare Standard

Since the 1980's, there have been arguments over which of two schools of thoughts our antitrust legislation should be based on. The school that has won out thus far is based on the belief that antitrust legislation should be made in defense of consumer ideals and welfare. However, there has recently been a shift towards the idea that antitrust legislation should be preventing monopolistic control so that companies cannot be big enough to corrupt politics. Significant reforms are most definitely needed to the current competition-based legislations, since many obvious antitrust cases have been difficult to win due to strict standards. However, modifying the basis of antitrust laws to the size of firms rather than how they affect consumers will cause consumer defense to starkly fall and will likely prevent technological innovation and competition since most large tech companies only have monopolies in one or two aspects of their overall field and many apps are even free to download and use. Rather than destroying the expanse of certain firms or specific parts of the industry, companies that are already large should be flagged and have to prove that any mergers are in the interest of the consumers. 

https://www.economist.com/leaders/2022/01/29/in-defence-of-the-consumer-welfare-standard

1 comment:

  1. Antitrust legislation should prevent monopolistic control so companies can not be big enough to corrupt policies. They are put in place to prohibit conduct by a single firm that unreasonably restrains competition by creating monopoly power. It makes sense to put these in place and possibly make them even stricter.

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