22 Loy. Consumer L. Rev. 336 (2009-2010)
Question: What Is the Real and Proper Antitrust Welfare Standard - Answer: The True Consumer Welfare Standard

handle is hein.journals/lyclr22 and id is 342 raw text is: QUESTION: WHAT IS THE REAL AND PROPER ANTITRUST
WELFARE STANDARD?
ANSWER: THE TRUE CONSUMER WELFARE STANDARD
Steven C. Salop*
I. Introduction
T here has been long-standing antitrust controversy regarding
the economic    welfare   standard   for antitrust.1    Some
commentators favor the aggregate economic welfare standard,
(sometimes called the efficiency or total surplus standard);
other commentators favor what I will refer to as the true
consumer welfare standard (sometimes called the pure consumer
welfare or consumer surplus standard). I am using the true
qualifier because of the confusion that has resulted from Judge
Robert Bork's usage of the term consumer welfare in referring
to aggregate welfare.2
The aggregate economic welfare standard would condemn
conduct only if it decreases the sum of the welfare of consumers
(i.e., buyers) plus producers (i.e., sellers plus competitors); and
without regard to any wealth transfers. Thus, efficiencies such as
cost savings can trump demonstrable consumer injury.           In
contrast, the true consumer welfare standard would condemn
conduct if it reduces the welfare of buyers, irrespective of its
impact on sellers.3 Efficiency benefits count under the true
* Professor of Economics and Law, Georgetown University Law Center. This
is a slightly revised version of testimony to the Antitrust Modernization
Commission (Nov. 8, 2005). I would like to thank Jonathan Baker, Dennis
Carlton, Aaron Edlin, Joe Farrell, James Kearl, Andrew Gavil, John
Kirkwood, Robert Lande, Robert Pitofsky and Rick Rule for helpful
conversations and comments.
This issue of the proper economic welfare standard may be different
from the legal standard used to achieve maximization of the economic welfare
standard. See, e.g., the recent symposium in 73 Antitrust L.J 2 (2006) on two
legal standards for Section 2.
2 Robert H. Bork, THE ANTITRUST PARADOX 3 72-74 (1978).
1 Most analysis of competing welfare goals takes place in a simple

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