The University of Chicago’s Stigler Center put together a stellar set of panelists for its 2022 Antitrust and Competition Conference on April 21-22. On the first day, the keynote speaker was Jonathan Kanter, Assistant Attorney General of the U.S. Department of Justice’s Antitrust Division. Kanter’s address centered upon five principles he believes should guide antitrust enforcement. Lina Khan, Chair of the Federal Trade Commission, was the keynote speaker on the second day. She addressed, among other themes, the importance of bringing hard cases to the courts, the connection between the FTC and US citizens, and her views on consumer protection.
Kanter’s Enforcement Principles
Kanter’s first principle is to recognize the purpose of antitrust law is “to protect competition.” Here he stressed that antitrust lost its north star somewhere along the way, getting lost in mathematical models. Kanter was particularly critical of the consumer welfare standard, stressing that it neither appears on any statute nor precedent. According to him, the only mandate Congress gave the DOJ was to “promote competition” and not choose winners. Kanter’s second principle is changing the language of antitrust to make sure it protects everyone. He argued that there must be a shift in the language antitrust uses, abandoning technocracy. He believes concepts like “small but significant and non-transitory increase in price” or “double marginalization” shield antitrust from the public and make antitrust only accessible to the powerful. A graduate degree in economics should not be required to understand the law, he said.
Kanter’s third principle is that new realities need new approaches. Here, he stated that the DOJ’s focus should be on facts rather than the assumptions that economic models build upon. Enforcers should pay attention to how competition works in the real world; for instance, the “general implausibility of predatory pricing” shows how poor policy may follow from theory detached from the real world. Kanter’s fourth principle is to enforce §2 of the Sherman Act. He referred to the now-famous Richard Posner’s interview in which Posner claimed that antitrust was dead. We know Posner’s remarks did not age well and that many of the companies Posner cited as the most successful in the world are now facing antitrust scrutiny. The final principle in Kanter’s list is to avoid settlements and litigate the cases, even the hard ones—regardless of their expected results. This is in part to develop precedents that adapt to the new market realities we witness nowadays after several decades in which there have been only a few cases that made it to the Supreme Court.
Khan’s Enforcement Priorities and How to Assess her Performance
Khan has been a critic of the primacy of economics in antitrust analysis. At the conference, she claimed antitrust settled at an end of history logic, neglecting more existential questions, such as what goals antitrust should pursue. When asked at the beginning of her lunch talk about how people should “assess her victory,” her answer was that victory means “people know we are there for them.” To put this into perspective, at the end of her talk, she mentioned that the FTC had opposed recent hospital mergers because they had found potential harm to the hospitals’ workers. She also stressed that the FTC is holding monthly open meetings where anyone can attend and tell what problems they see.
The answer about how to declare victory was different when asked an almost identical question at the end of the talk. Then, she said people should assess her performance based on whether the FTC brought the hard cases before the courts. Khan had an interesting view of how the FTC’s defeats may trigger legislative proposals to make it easier for the enforcers to protect consumers. In her opinion, Congress has been a “backseat player” in developing antitrust law, yet this is changing. Now that Congress is more active, the FTC should enforce the current laws to trigger an institutional debate between the three branches of government.
Another topic she talked about was the role of the FTC in enforcing consumer protection laws. The general mandate stated in the FTC Act is to protect people from unfair or deceptive acts or practices. In this respect, Khan discussed her interest in dark patterns and other manipulative practices in which consumers are not making an actual choice. Because of this, she claimed the “notice-and-consent” model should be replaced by a new one. She did not shed light on how to come up with an alternative considering the different consent logic that applies to business-to-business and consumer contracts and the impossibility of personalizing contracts for each consumer. At this point, she applauded the European General Data Protection Regulation (GDPR), saying it was a valuable experience to have as a potential model, and hinted that the FTC itself could use its rule-making powers to proscribe unfair or deceptive business practices.
