Analysis Group Authors Explore the Economic Rationale for the Consumer Welfare Standard in Antitrust and Merger Reviews
November 14, 2019
Publishing in the CPI Antitrust Chronicle, Managing Principal Rebecca Kirk Fair, Associate James Bernard, and Professor D. Daniel Sokol, of the University of Florida Levin School of Law, contribute to the renewed debate over the relevance of the consumer welfare standard in antitrust review.
In “Why Does the Consumer Welfare Standard Work? Matching Methods to Markets,” the authors explore the use of economic analysis in an antitrust context, starting with an overview of the nature of antitrust law and the evolution of economic theory as a means for understanding how it works. They also briefly discuss problematic proposals to replace the economics-based consumer welfare standard with an indeterminate “fairness” standard.
The authors then summarize several high-profile case examples from merger reviews to show how economic analysis has shifted over time in ways that either have promoted or have limited enforcement. The examples are used to demonstrate the critical role that economic evidence plays in mapping theory to practical realities and serving as the foundation for the courts’ adoption of the consumer welfare standard.