Foreword: Rethinking Antitrust

• Jurisdiction: United States,Federal
• Publication year: 2022
• Citation: Vol. 38 No. 4

Foreword: Rethinking Antitrust

Susan Smelcer
ssmelcer@gsu.edu

Jeffrey L. Vagle
jvagle@gsu.edu

FOREWORD: RETHINKING ANTITRUST

Susan Navarro Smelcer and Jeffrey L. Vagle^*

After a lengthy period of quiescence, public interest in, and regulatory activity around, antitrust law have taken on a renewed vigor.¹ Policy shops and think tanks have focused on antitrust as the antidote for concentrated agricultural sectors, ascendant technology platforms, wage and employment issues, and more.² As of this writing, new leadership in the Federal Trade Commission and the Department of Justice's Antitrust Division seek to rewrite the rules governing horizontal merger review and publicly seek expanded enforcement roles across the economy.³

Why the sudden resurgence of interest around a subject that has been relatively quiet for nearly four decades? In the postwar era, antitrust activity was quite robust—due in no small part to the theory that competition policy, in its goals of spreading economic and political power to the many rather than the few, was a means of fighting authoritarianism.⁴ Starting in the late 1970s, however, antitrust theory shifted away from non-economic goals, based instead on benefits to consumers.⁵ These shifts in policy have not come from new legislation.⁶ Indeed, antitrust's foundational texts have changed little since their initial writing—a time when steel, oil, and railroads were matters of chief concern.⁷ But changing antitrust doctrine, as pronounced by administrative agencies and courts, is rooted in evolving economic theory and tools, with courts interpreting the original statutes through these new lenses.⁸ Since the last doctrinal shift, however, economic and political theories have evolved, but antitrust precedent has been slow to change.⁹ Recognizing this gap, policymakers, scholars, and advocates have called for a reexamination of original antitrust principles to better address contemporary economic and social issues.¹⁰

This Symposium Issue begins with two articles that reflect on several aspects of the disconnect between the economic reality of our deeply interconnected economy and economic theory as applied by agencies and courts. In the first Article of this Issue, Cognitive Foreclosure, Peter O'Loughlin addresses the shortcomings of rational choice theory—a foundational assumption of microeconomic theory—to effectively regulate (or even describe) consumer behavior in digital markets.

In particular, O'Loughlin examines the role that behavioral economics may play in antitrust theory and argues for increased attention to the ways in which companies, particularly technology companies, can engage in anticompetitive behavior by manipulating their consumers' inherent biases and limited information. This behavior is not new in the digital realm. Similar actions have been the basis of claims against Microsoft in both the United States and the European Union, which have been litigated for years.¹¹

But O'Loughlin highlights the increasingly pernicious nature of firms' efforts to exploit cognitive biases when the product used by consumers is a technological black box. These types of products, O'Loughlin argues, allow technology firms to induce "demand-side antitrust foreclosure." Rather than actively foreclosing a rival seller of transparent tape¹² or prescription drugs,¹³ firms can induce consumers to foreclose their rivals for them.

Firms' ability to manipulate consumers is especially pronounced on digital platforms. Digital purveyors are "uniquely positioned to totally control . . . and manipulate platform context and interface, product positions, and information" far beyond the capacity of traditional brick-and-mortar stores.¹⁴ This wholesale control over the consumer implicates a variety of cognitive responses that makes consumers more susceptible to manipulation.

Is this behavior anticompetitive? More specifically, does it reach a level of anticompetitive behavior so as to trigger antitrust investigation or enforcement? The answers to these questions depend heavily on which school of antitrust thought is responding. Rational choice theory is the foundation for modern antitrust law. Behavior short of outright deception would be an impossibility for a rational actor. But our understanding of human cognition has shifted over time—and in ways that are difficult to reconcile with our existing understanding of what constitutes actionable anticompetitive behavior.

O'Loughlin's wide-ranging discussion of demand-side foreclosure points to the need to reinterpret the textual bases of antitrust law in light of our evolving understanding of...