OP-ED

Antitrust Law: Washington’s Bad Example for the States

August 27, 2022

Former President Lyndon B. Johnson once said, “the Secretary of Labor is in charge of finding you a job, the Secretary of the Treasury is in charge of taking half the money you make away from you, and the Attorney General is in charge of suing you for the other half.”

The latter statement might seem true today to Big Tech executives, who face innumerable antitrust lawsuits from U.S. Department of Justice, the Federal Trade Commission, and dozens of states. But for Republicans attorneys general, who are meeting this weekend in Colorado Springs to discuss antitrust law, the prime concern of their antitrust lawsuits should be, are they really adhering to the principle of antitrust enforcement that has been it’s North Star for almost 50 years.

I am talking about the antitrust doctrine developed by my father, Judge Robert Bork, the Consumer Welfare Standard. Rather than use antitrust law to protect weak competitors, then-Prof. Bork’s legal and economic analysis convinced the Supreme Court in 1979 to judge a business merger, acquisition, or practice by its impact on consumers. The goal was not just to drive lower consumer prices. The Consumer Welfare Standard also meant that judges should evaluate deals by their impact on choices available to shoppers and the business innovation that serves us all. 

This policy has been remarkably successful. 

During the forty-plus years of the Consumer Welfare Standard, the economy tripled in size from 1980 to 2020, Americans’ per capita income doubled, and the stock market boomed. If you had invested $1,000 in the S&P 500 at the time the U.S. Supreme Court adopted my father’s Consumer Welfare Standard, you would have had about $100,000. 

State Republican AGs, however, should note that this relentless focus on the consumer is getting lost with their partisan brethren in Washington, D.C. Senate Republicans are in a lather about Big Tech censorship of conservative speech. They are not wrong about this. But in their anger, these Republicans are being tricked by progressive Democrats into supporting radical legislation that would subject the economy to heavy, state-directed regulation and make social media and corporate C-suites more “woke” than ever before. 

One example: Some Republican senators are supporting Sen. Amy Klobuchar’s signature Big Tech antitrust bill – the American Innovation and Choice Online Act – thinking it will somehow “break up” Big Tech and curb censorship. It will do neither. But this bill will subject businesses to death-penalty fines of 15 percent of revenues for vaguely defined infractions. Sen. Tom Cotton noted the bill “includes language that could catch up a lot of other firms that are nothing like these [social-media] companies . . . potentially treating Kroger, or Piggly Wiggly, or Home Depot with the same kind of antitrust restrictions that we expect on Facebook, Apple, or Google.”

With such heavy penalties, this bill would give Biden’s hyper-woke and aggressive regulators the means to keelhaul any CEO who is not sufficiently woke or deferential to the liberal agenda of the Biden Administration. This would not be “breaking up Big Tech.” It would be the ultimate merger between Big Washington and Big Silicon Valley.

The confusion of Senate Republicans is mirrored by the complacency and even approval of many Republicans with what his happening at the FTC. Long rated in official government surveys as a top agency, the FTC under Chair Lina Khan is today near the bottom in employees’ ratings of their leaders “honesty and integrity.” It is easy to see why. Acting more like a commissar than a commissioner, Khan has sidelined her experts and trashed professional procedure. She is abandoning the Consumer Welfare Standard to reorient antitrust law to protect a grab bag of “equity” issues, including the protection of labor and inefficient competitors who poorly serve consumers.

As Beltway Republicans lose their bearings, it is more important than ever for state attorneys general to keep consumer welfare foremost in mind and not get tricked into supporting cheap theatrics that undermine the free market. 

Robert H. Bork Jr. is the president of the Antitrust Education Project.