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37 Antitrust 18 (2022-2023)
Antitrust Concerns and Kanter's Cures

handle is hein.journals/antitruma37 and id is 20 raw text is: C O V E R S T O R I E S Antitrust Concerns and Kanter's Cures BY BRIANNA L. ALDERMAN AND ROGER D. BLAIR N RECENT SPEECHES, U.S. DEPARTMENT OF Justice Assistant Attorney General Jonathan Kanter has voiced his dissatisfaction with antitrust enforce- ment and the level of concentration in U.S. markets. We agree with some, but not all, of Kanter's con- cerns. More importantly, we believe that Kanter's diagnoses of the problems and his prescription for their alleviation misses the mark. In an effort to make a positive contribution to improving the competitive landscape across markets in the U.S., we examine three issues: (1) the consumer welfare standard, (2) merger policy, and (3) the protection of farm- ers and workers. Initially, we examine the consumer welfare standard as a guide for antitrust enforcement. Next, we review examples of Supreme Court decisions that identify the goal of antitrust policy as the protection of competition and the competitive process. We point out that these cases illustrate the complex- ity of this prescription. We argue that a stumbling block for antitrust enforcement is oligopoly as there appears to be no remedy for the non-competitive outcomes that accompany oligopoly. We then move on to review the Supreme Court's merger decisions in the Philadelphia National Bank1 era. In our opinion, a return to the good ole' days is not advisable. Lastly, we examine Kanter's concern for farmers and work- ers. Kanter's concern is not entirely misplaced, but the cause can be found in judicial decisions rather than lax enforce- ment efforts. The Consumer Welfare Standard In his May 2022 Milton Handler speech,2 Jonathan Kanter seems to believe that protecting competition and promot- ing consumer welfare are inconsistent, but they are not. The major economic benefit of competitive markets is that these markets result in the maximization of consumer welfare and Brianna L. Alderman is a Ronald E. McNair Research Scholar, Depart- ment of Economics, University of Florida. Roger D. Blair is a Professor, Department of Economics, University of Florida, and affiliate faculty, Levin College of Law, University of Florida. We are grateful for the gener- ous financial support of the Robert F. Lanzillotti Public Policy Research Center, the Ronald E. McNair Scholars Program, and the University of Florida's Department of Economics. Neither of us has been retained by any party with an interest in the issues raised in this article. social (or total) welfare. This is the economic rationale for an antitrust policy that condemns monopoly and monop- sony, whether structural or cooperative, thereby protecting competition and the competitive process. This is easy to see with fundamental economic principles. Monopoly and Seller Cartels. In Figure 1, D represents the consumer demand for a good or service while S rep- resents the supply of that good or service. Competition results in sales of Q units at a price of P1. Consumer surplus is the difference between the consumer's willingness to pay and the price that the market requires. In Figure 1, this is the triangular area abP1. Producer surplus is the difference between the price received and the price that must be paid to have the good or service provided. In Figure 1, producer surplus is the triangular area Plbc. Social welfare is the sum of consumer surplus and producer surplus, i.e., the triangu- lar area abc in Figure 1. Given the demand and supply of the good or service, no other price and output combination will generate as much surplus as the competitive solution. In fact, any deviation from P1 and Q will reduce social welfare. Price a P2 P5 C 0 S d I b I I I I I I D I I I MR Q2 Qi Quantity Figure 1 1 8 A N T I T R U S T

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