Antitrust’s Neglected Question: Who Is “The Consumer”?

• Author: Caron Beaton-Wells
• Published date: 01 March 2020
• DOI: 10.1177/0003603X19898606
• Date: 01 March 2020
• Subject Matter: Articles

Article

Antitrust’s Neglected Question:

Who Is “The Consumer”?

Caron Beaton-Wells*

Abstract

In a period when debate about the goals, scope, and effectiveness of antitrust policy and law is

flourishing, it is timely to revisit the fundamental question of whose interests these instruments are

intended to protect. In considering whether antitrust’s primary concern should be with consumer

welfare, few have paused to consider the nature of consumer identity other than through the narrow

economic prism of the purchase and use of goods and services. However, consumers are not mere

choosers of offerings in the market place, an identity itself riven by complexity and contradiction.

Consumers act also as citizens and workers in markets. Recognition of the multifaceted and indivisible

character of consumer identity promotes a richer more sophisticated approach to defining and

applying a consumer welfare standard. The case for such an approach is illuminated in the context of

the new economy in which the interests of consumer-citizens and consumer-workers are directly

implicated by the challenges facing competition in digital markets.

Keywords

antitrust, consumer welfare, technology

I. Introduction

Debates about the objectives of competition law and, relatedly, its scope and the approach taken to its

enforcement are long-standing. In recent years, they have been reinvigorated, most actively and

prominently in the United States (U.S.). Driven by concerns about high levels of concentration,

stagnation in wages, faltering productivity, and reduced business dynamism, there has been a growing

chorus of criticism of the approach taken to antitrust doctrine and its enforcement in that jurisdiction.

1

Under the banner of a New or Neo-Brandeisian movement, at the heart of this critique is a view that the

*University of Melbourne, Melbourne, Australia

Corresponding Author:

Caron Beaton-Wells, University of Melbourne, Melbourne 3010, Australia.

Email: c.beaton-wells@unimelb.edu.au

1. See, e.g., TIM WU,THE CURSE OF BIGNESS:ANTITRUST IN THE NEW GILDED AGE (2018); JONATHAN TEPPER &DENISE HEARN,THE

MYTH OF CAPITALISM:MONOPOLIES AND THE DEATH OF COMPETITION (2018); Open Markets Institute, America’s Concentration

Crisis (2018), https://openmarketsinstitute.org/commentary/americas-concentration-crisis/ (last visited June 1, 2019); Lina

Khan, Amazon’s Antitrust Paradox, 126 YALE L.J. 710 (2017).

The Antitrust Bulletin

2020, Vol. 65(1) 173-193

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DOI: 10.1177/0003603X19898606

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Chicago school-inspired consumer welfare standard that has prevailed since the 1970s has been

inadequate to protect the competitive process.

2

Meanwhile, across much of the rest of the world,

consumer welfare has continued to feature as a significant competition policy objective

3

or at least

as a desired or expected outcome of other objectives such as promoting efficiency and protecting the

competitive process.

4

It has been acknowledged for some time and by commentators across the intellectual spectrum that

there is ambiguity surrounding the meaning of “consumer welfare.”

5

However, much of the effort

directed at addressing the definitional conundrum has focused on what “welfare” should entail, how

different elements of it should be weighed and prioritized, and how it should be assessed and measured

in light of rule of law considerations.

6

By contrast, relatively little attention has been given to the

quintessential question: Who is the consumer?

Consumer identity has been arguably one of the most neglected topics in antitrust discourse to date.

7

This is despite its potential ramifications for critical concerns regarding the goals and scope of the law.

Understanding the identity of the intended beneficiary or beneficiaries of a policy or law should be

fundamental in the process of setting its objectives as well as in assessing the effectiveness of the

approaches taken in meeting them. In the context of the new economy, in which markets are being

digitally transformed and substantial attention given to the response by competition law and its

enforcement authorities, this task is even more pressing.

Making these observations is not to overlook discussion as to whether producers as intermediate

purchasers, particularly small producers, should be included in the definition of “consumers” and also

debates as to whether it is a consumer welfare or a total (aggregate) welfare standard that should

2. See, e.g., Lina Khan, The New Brandeis Movement: America’s Antimonopoly Debate,9J.EUR.COMPETITION L. PRAC. 131

(2018); Maurice Stucke & Ariel Ezrachi, The Rise, Fall and Rebirth of the US Antitrust Movement,HAR.BUS.REV.(Dec. 15,

2017), https://hbr.org/201 7/12/the-rise-fall-and- rebirth-of-the-u-s-antit rust-movement; MARSHALL STE INBAUM &MAURICE

STUCKE,ROOSEVELT INSTITUTE,THE EFFECTIVE COMPETITION STANDARD:ANEW STANDARD FOR ANTITRUST (2018); JONATHAN

B. BAKER,THE ANTITRUST PARADIGM:RESTORING A COMPETITIVE ECONOMY (2019).

3. It is fair to say that competition systems outside the U.S. do not appear to struggle (at least not to the same degree) over the

issue as to whether antitrust should have a singular or pluralistic approach to its objectives. See, e.g., Ariel Ezrachi, EU

Competition Law Goals and the Digital Economy (Jun. 6, 2018), https://papers.ssrn.com/sol3/papers.cfm?abstract_id¼3

191766, identifying consumer welfare as one of a range of competition policy goals in the European Union. See further

Spencer Waller, The Omega Man or The Isolation of U.S. Antitrust Law (Dec. 22, 2018), https://papers.ssrn.com/sol3/papers.

cfm?abstract_id¼3295988.

4. See Maurice E. Stucke, Reconsidering Antitrust’s Goals,53B

OS.C.L.REV. 551, 567–68 (2012) citing inter alia

INTERNATIONAL COMPETITION NETWORK,REPORT ON THE OBJECTIVES OF UNILATERAL CONDUCT LAWS,ASSESSMENT OF

DOMINANCE/SUBSTANTIAL MARKET POWER,AND STATE-CREATED MONOPOLIES (2007).

5. See, e.g., Joseph F. Brodley, The Economic Goals of Antitrust: Efficiency, Consumer Welfare, and Technological Progress,

62 N.Y.U. L. REV. 1020, 1032 (1987); Gregory J. Werden, Consumer Welfare and Competition Policy,inCOMPETITIONPOLICY

AND THE ECONOMIC APPROACH:FOUNDATIONS AND LIMITATIONS 15 (Josef Drexl et al. eds., 2011); Barak Orbach, The Antitrust

Consumer Welfare Paradox,7J.C

OMPETITION.L.ECON. 133 (2011).

6. In the U.S., these issues have generated a substantial body of antitrust scholarship, largely by way of interpretations and

critiques of the treatise generally accepted as the source of the “consumer welfare standard,” the seminal work of ROBERT

BORK,THE ANTITRUST PARADOX:APOLICY AT WAR WITH ITSELF (1978). See generally Barak Orbach, How Antitrust Lost its

Goal,81F

ORDHAM L. REV. 2575 (2013); Symposium, Robert Bork and Antitrust Policy,79ANTITRUST L.J. 821 (2014).

7. “Identity” is understood for this purpose as simply “the fact of being who or what a person or thing is” or “the characteristics

determining who or what a person or thing is”. See Identity,OXFORD DICTIONARY, https://en.oxforddictionaries.com/definition/

identity. This approach implies a focus on “the consumer” as an actual person. However, it is also important to recognize that

for the purposes of policy and regulatory choices, “the consumer” is largely a fictitious and normative construct, recognition

that may be conveyed by reference to “images” of the consumer: see IMAGES OF THE CONSUMER IN EU LAw: LEGISLATION,FREE

MOVEMENT AND COMPETITION LAW (Dorota Lecykiewicz & Stephen Weatherill eds., 2016).

174 The Antitrust Bulletin 65(1)