The Dunkin’ Donuts Suit and Economic Illiteracy

January 25, 2024

The most striking – and risible – feature of recent federal antitrust lawsuits is their paucity of economic logic. This is on display from the self-contradictory arguments of Lina Khan’s FTC antitrust case against Amazon, to DOJ’s illogical suit against the JetBlue-Spirit merger. Both would reduce consumer choices and raise prices in the name of protecting the consumer.

Now Stephen Carter of Yale Law writes in Bloomberg about a lawsuit against Dunkin’ Donuts that highlights the economic illiteracy flooding our courtrooms. A lawsuit against the chain coffee and bakery store alleges that the practice of charging more for non-dairy additives like almond or soy milk is a blatant violation of the Americans with Disabilities Act. Why? Because people who are sensitive to milk must pay a little more for a plant-based additive.

The Dunkin’ suit is not an antitrust case, but it illustrates the trend of replacing economic logic with rhetoric and legal sophistry. The suit acknowledges that non-diary milk is more expensive, but it asserts that Dunkin’ has the market power to force producers to lower prices. Carter responds: “If Dunkin’ can do that, it would have already done that. It’s in the business to maximize profit.”

I recommend reading his piece, in which Carter skewers this lawsuit, noting how following its logic could lead to antitrust violations. It is not unusual for plaintiffs’ lawyers to craft suits in which they claim to have a better understanding of markets than economists, of medicine than board-certified physicians, and of product design than engineers.

It is understandable why plaintiffs’ attorneys act this way. They, too, want to maximize profit. It is less understandable why federal regulators – Lina Khan has 80 economists on tap at the FTC – are writing suits that are so poorly reasoned with no real-world economic modeling.

Unless, they too are maximizing … not profits exactly … but power.