[Congressional Record Volume 163, Number 153 (Monday, September 25, 2017)]
[Senate]
[Pages S5875-S5877]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Antitrust

  Mr. HATCH. Mr. President, I rise today to return to the topic of 
antitrust. When I last spoke on this matter, the debate was already 
simmering, albeit mostly on the left. In the time since, controversy in 
both our markets and our politics has kept it at the fore.
  Handled prudently, that can be a good thing. I say we have this 
discussion. I think it is important. Heavens, I will even try to do my 
part to make it a little more fun. But I do have my concerns that the 
topic of antitrust policy is still more enthusiastically invoked than 
deliberately considered.
  I am concerned that it is still undermined by the same old easy 
retreats to the right and to the left. That may be typical of issues 
here in Washington, but on no issue can we afford it less. You see, 
especially in antitrust policy, it is critical that the center hold. It 
is critical that we secure that delicate middle ground--hard won over 
the years and easily lost in a moment of fervor--whereon economic 
liberty thrives.
  I have come to the floor, once again, to speak and, to the growing 
discussion, to contribute.
  Permit me to say a few words about holding the center. When I took to 
this floor last month, I argued that on the fundamental question of 
economic management, America has courageously defied the historical 
norm. Rather than acquiescing to the central planning, we fully 
embraced free enterprise. Thus, ours is a market economy and the most 
prosperous one of our times.
  Markets are messy. They are chaotic and, from the individual 
perspective, impossibly complex. Perhaps, most counterintuitively, they 
are, in a sense, disorganized.

  For all their productivity, for all the wonders they work, there is 
no single actor or entity in control. The miracle arises all on its 
own, through an order

[[Page S5876]]

spontaneously coordinated by price and balanced by the efforts of 
millions. Little surprise then that in America's free enterprise 
tradition, no less than in its larger political tradition, we deeply 
distrust concentrated power. We distrust the intervention of the State, 
to be sure.
  Our system is largely defined by limited government but so, too, do 
we cast a wary eye upon powerful private entities. We have little 
tolerance for the monopolist which secures its market position 
anticompetitively, and we offer no quarter to the naked cartel. In 
other words, we no sooner trust concentrated private power than 
concentrated public power to dictate the direction of our economy.
  That, right there, is why we turn to antitrust. That is the middle 
ground--between intrusive public management and corrosive private 
conduct, which antitrust is charged with seizing and protecting, for we 
know our markets will never fulfill their promise unless they remain 
free and competitive, and we know they will not long remain free or 
competitive without a sound competition policy holding that center 
ground.
  Now, as I mentioned earlier, events of late seem determined to keep 
antitrust at the forefront of the public debate. We are witnessing 
innovation and disruption at a dizzying pace. Markets are 
concentrating, powerful players are staking out valuable ground, and 
accusations of anticompetitive behavior--some bona fide and many not--
are mounting. Across the board, an anxiety seems to be settling in.
  Therefore, I want to be very clear, especially to my friends on the 
left: I see it. I understand it. That the challenges here are real, 
there can be no real doubt. That an update in the doctrine may well be 
necessary, there should be no dispute. Where, perhaps, I differ is that 
I don't quite see the need for the panic. I think American antitrust is 
up to this challenge.
  The story of capitalism has always been a story of change, and if we 
are doing things right, that change does not come according to anyone's 
plan or script. Just when society grows comfortable in habits of law 
and commerce--just as each part of the economy learns to play its 
part--the ground again shifts beneath our feet. It can be a bit 
disorienting but not to worry. That is where our old, trusted friend, 
the consumer welfare standard, comes back in.
  As I emphasized in my last address on the floor and as I will 
continue to emphasize here, it is a proven way of directing us aright. 
As new innovation fundamentally alters the landscape, as entrepreneurs 
press beyond current frontiers and into the unknown, the consumer 
welfare standard is like a compass with a bearing set toward that 
critical middle ground which antitrust is charged with protecting. True 
north is not what is best for market competitors, not what is most 
convenient for market regulators, but what most furthers market 
competition itself, the better to ward off the dangers of collectivism, 
the surer to escape the stagnation of monopoly.
  Now, I know--I understand--that this hardly settles things. 
Identifying the principle by which we orient ourselves is the start of 
the discussion, not the conclusion. The consumer welfare standard is, 
like I have said, a compass; it is not a map. It guides our journey 
without fixing a precise course through the changing terrain. 
Adjustments are to be expected. After all, much of antitrust doctrine, 
as it is received today, was built upon the familiar economic process 
of resource extraction, manufacture, distribution, and retail.
  That the digital age would present commercial arrangements to defy 
those traditional classifications is not, altogether, surprising. 
Fortunately, antitrust is a common law exercise and leaves plenty of 
room for improvement. Our conventional categories of anticompetitive 
conduct can be tweaked, refashioned, or even expanded in light of 
technological advancement and market evolution. That process will 
become all the easier as our tools for taking the measure of the land 
improve.
  Current analysis does well in taking account of price. It may do 
better still in taking account of quality. Reams of data never before 
thought obtainable and new econometric methods only recently deemed 
practical entice us with a chance to plot curves, which until recently 
were confined to the theoretical. Our basic and time-honored 
foundational models are increasingly nudged and bounded by 
contributions from the behavioral sciences, and game theory is 
continuously opening new horizons in market analysis.
  I am happy to have that discussion. Again, we keep our markets fresh 
by keeping our doctrine current, but I would--as an old Republican 
must--urge caution, especially to some of the more zealous advocates 
for reform, hipster or otherwise. I will gladly sample the avocado 
toast--I really will--but nobody should get the idea that we have moved 
on from the meat and potatoes. It is easy, with the benefit of 
hindsight, to critique past precedent formed in the familiar image of 
the mass industrial process. It is far more difficult to refashion 
doctrine for a new age that is still evolving in surprising ways.
  As we trek into the unknown, let's take note of where we have been 
and appreciate the hazards of the route. Let's recall that whatever the 
changes at the surface of the market, basic economic principles persist 
through the ages. Network effects in our digital infrastructure may 
feel very new today, but as I emphasized in my last address, the 
concept is actually very old. It structured the telephone market long 
before we could even conceive of an online search market. Let's recall 
also that the foresight of regulators and thus the wisdom of their 
regulation is inevitably limited.
  We talk a lot about platform economics today and worry about the 
bottlenecks of digital traffic as if the future has finally and 
permanently arrived, but with the rate of innovation these days, there 
is no telling whether the essential facilities of today will prove all 
that essential tomorrow. We can do little more than guess at what form 
exclusive dealing or foreclosure may take in markets yet unseen. Let's 
recall that markets often correct themselves. As more than a few 
formally invincible corporate titans can attest, free enterprise offers 
few opportunities for eternal life, and when regulators do step in, 
doctrine still tends to lag behind the market. Thus, the powers we 
grant government now will likely survive into a future that is not yet 
defined.
  Finally, before we rush to grant enforcement officials a broad 
mandate with an ill-defined objective to do something, let's recall 
that regulation can hurt as much as it can help. As we have seen in 
some attempts at rate regulation, a regime meant to restrain the 
biggest players may very well, with the passage of time, become the 
preferred tool for excluding new entrants. Merger analysis sometimes 
does more for rivals than for consumers, and as we have learned in 
nearly every form of intervention, a medicine which creates too much 
unpredictability and upsets too many investment-backed expectations may 
well prove worse than the disease itself.
  In the end, like I said, I think we are up to this challenge. With 
compassion in hand, an open mind, and appreciation for what our journey 
thus far has taught, antitrust will continue the work of securing that 
middle ground whereon markets thrive. When all is said and done--after 
all of the controversy and high emotion have subsided--we may just find 
that all we needed was a small course adjustment. Perhaps this needn't 
be a reckoning when just a little reform will do. We can set about 
correcting market failures and readjusting system incentives without 
going after some industry or bringing this or that firm to heel.
  When I first sounded the alarm on Microsoft--years ago really--it was 
not merely because it was deemed too powerful or because a new class of 
high-tech barons risked undermining democratic norms; it was because of 
well-founded concerns of concrete, competitive harm to developing 
markets.
  The question in antitrust was not then--and we must not allow it to 
become today--whether any of our companies are too big or too 
profitable or too dominant; the question is whether they engage in 
identifiable anticompetitive conduct or if a merger is likely to 
facilitate it.
  The question is whether it can be shown, as far as the imperfect 
tools of economics allow and an evolving doctrine can bear, that the 
conduct at issue or the merger proposed does more to fortify the firm 
than serve the consumers of America.

[[Page S5877]]

  Of course, that kind of analysis may not make headlines, and it may 
not satisfy our deep-seated yearning to identify heroes and villains, 
but it is the best way to handle antitrust. If we are going to get this 
right, we are going to need to keep cool heads.
  Antitrust already asked some of the hardest questions, like why we 
allow the market to put scarce resources to their highest uses when our 
social and political valuations do not match that of prevailing prices. 
Antitrust already forces some of the hardest choices, like how to trade 
the losses of some industries and some actors for the gains of the 
economy as a whole.
  There is no need to make things harder still by turning antitrust 
into a political cudgel, as the left is wont to do, or by dismissing it 
as yet another example of government overreach, as the right is often 
guilty.
  So let us let all of us on all sides tone down the political 
rhetoric. Should this debate do no more than feed our appetite for 
political gamesmanship, antitrust will not be the better for having it. 
Do you know what? I do not think I am alone here. My colleagues in the 
Senate seem to be rising to the occasion. My friends on the other side 
of the aisle introduced legislation that, however flawed in my view, 
reflects the seriousness with which they take these issues.
  I am happy to see there is finally movement again on the nomination 
of Makan Delrahim. He is an exceptional antitrust attorney and just the 
person we are going to need as we sort this thing all out. I will not 
shy from discussing his qualifications here, and I would not fault my 
colleagues for using his nomination as an opportunity for a wider 
discussion on antitrust, but now it is time to put him to work. I am 
pleased to see we are almost there.
  At the same time, this debate is not going to be confined to the 
floor of the Senate. At the agencies, in the courtroom, from the 
lecture hall to the opinion pages, there are going to be a lot of 
voices weighing in. Most, we can hope, will be helpful. All, we can 
resolve, will be heard, I hope.
  I want to applaud those on the left for jumping into this debate, and 
I wish the best of luck to the new Open Markets Institute. I had a 
little fun with the hipsters the last time around, and they took it in 
good stride. I am now told some prefer the title New Brandeis School. I 
think that is fitting. Justice Brandeis was a bit of a hipster in his 
time. I should know, as I was basically a contemporary of his.
  Further, I acknowledge the efforts of private litigants and policy 
advocates pressing their cases in courts here and in Europe. They have 
been working tirelessly to make a data-driven case that speaks directly 
to consumer harm. They play an important role, and the doctrine is 
better for their efforts, however their cases turn out.
  Finally, I want to implore my fellow conservatives, continue joining 
in on this debate, keep investing in antitrust, embrace it as an area 
of the law in which we speak to the power of the markets by speaking to 
the importance of sound regulation. Make the case that, like property 
or contract or commercial law, antitrust is that rare species of 
government regulation which opens doors rather than slamming them shut.
  As I have been arguing for decades now, should our doctrine grow 
stagnant, markets may well concentrate beyond what is politically 
acceptable, calls for excessive government intervention will only 
increase, and the yoke of the regulator could soon be our portion.
  With that, Mr. President, I will close right where I began. As this 
debate proceeds, it falls to all of us to do our part in getting this 
right. The challenges presented by our evolving markets are real, but 
we are not the first to break new ground, and will we be the last to 
worry that the new ground broken sits far removed from the 
competition's precious center? One way or another, we have made it 
before. I trust we can make it again.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.