[Congressional Record (Bound Edition), Volume 163 (2017), Part 9]
[Senate]
[Pages 12591-12594]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          MODERN ANTITRUST LAW

  Mr. HATCH. Mr. President, I rise today to speak on a policy matter 
that

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has been generating substantial attention recently, and that is modern 
antitrust law. This issue is critical. In the perennial debate over the 
proper role of government in economic affairs, it will grow all the 
more critical in the years to come.
  New technologies, creating markets not even imaginable only a decade 
ago, are spurring fundamental shifts in the economic landscape. In the 
national news, mergers between corporate giants or new fines imposed by 
foreign regulators are becoming an acceptable thing almost every day. 
In the Senate, we increasingly see antitrust law dragged into larger 
economic arguments that are heavier in inflammatory rhetoric than in 
careful deliberation. Allow me, then, to offer a few thoughts on the 
matter, and to directly address the rising controversy.
  America has always been--and, I haven't a doubt, will remain--the 
economic and technological marvel of the world. Cradled in the best 
traditions of the West and animated by a culture equal parts 
industrious, creative, and restless, our system has produced the most 
prosperous people in human history. It has shown its shortcomings, to 
be sure. But on the whole, the American economy is unrivaled by any 
other. Indeed, at times its blessings are so bountiful, its provisions 
for the creation of wealth so effective, that we tend to take it for 
granted in this country. We tend, at times, to forget what got us here.
  A big part of what got us here is American antitrust law. You see, 
all throughout history, societies and governments have tended toward 
the central planning of economic activity.
  America, however, chose a different path. We refused to yield to the 
false comforts of collectivism. We opted, instead, for an economy that 
was vibrant, tumultuous, competitive, and free. It is fortunate that we 
did, for we have found that in the impossible complexity and unsettling 
chaos of the market--wherein millions of consumers and producers make 
millions of individual and uncoordinated decisions each and every day--
a spontaneous order arises that serves all of us far better than any 
central authority ever could. Of course, our markets work toward those 
ends only when they are genuinely free, fair, and competitive. That is 
where antitrust comes in.
  In a very real sense, antitrust is the capitalist's answer to the 
siren song of the central planner. When antitrust doctrine is referred 
to as the Magna Carta of the free enterprise system, I suspect this is 
what we mean.
  Let me be clear: Antitrust doctrine in this country has not always 
gotten it right. As we all know, early antitrust policy tended to 
confuse protection of market participants for protection of the market 
itself; it was quick to micromanage particular industries, to choose ad 
hoc intervention over predictable systems of incentives, and to cast 
suspicion on any market too concentrated or business too big.
  Fortunately, antitrust doctrine grows and adapts. It develops in the 
same wonderful tradition and manner as the common law. Just as the 
common law historically gave us property, contract, and commercial 
rights, so too upon their basis does antitrust seek, year by year, to 
give us markets that are competitive and free. Thus, the modern era of 
antitrust has produced a fundamental improvement in our competitive 
doctrine.
  We have steadily adopted the consumer welfare standard, which judges 
the conduct of firms and the arrangement of markets by what will 
maximize efficiency and therein serve consumers most completely.
  There will always be market failures to account for and noneconomic 
concerns to keep in mind. But when it comes to the core, basic 
functioning of the market--how to deliver the most goods to the most 
people at the highest quality and lowest cost--consumer welfare still 
works best.
  In most industries, most of the time, we ought to think a little less 
about how best to regulate the market and a little more about how best 
to set the market upon regulating itself. The disciplining effects of 
competition and the limitless store of American ingenuity do far more 
for consumers than the well-intentioned intervention of government 
authorities.
  The consumer welfare standard has, consistently over the years, 
proved an absolute boon to our economy and our society. Of course, a 
legal standard means little unless handled with care.
  We have chosen the right standard; now we must keep choosing the 
right officials to implement it. You see, under the consumer welfare 
standard, good antitrust enforcement is a lot like good sports 
officiating. It harnesses, rather than stems, the flow of the action. 
It lays out limited, predictable, and reliably enforced rules. It gets 
the most out of the players and the competition itself, regardless of 
which team is in the lead. Most importantly, as any sports fan could 
tell you, when officiating is done right, we hardly notice the refs at 
all.
  With the right antitrust officials cognizant of their role, we can 
expect a spirited contest in which American entrepreneurs keep putting 
points on the board and American consumers keep reaping the reward.
  Federal judges, naturally, are critical. In disputes of consequence, 
they provide the ultimate backstop.
  Also critical are our executive officials. Makan Delrahim, for 
instance, has been nominated to lead the Antitrust Division at the 
Department of Justice. He is eminently qualified, enjoys broad, 
bipartisan support, and is at the ready to start as soon as he receives 
our consent. I will urge my colleagues in the Senate, once again, to 
take up his nomination and confirm him to this important post. He has 
both Democrat and Republican support. He is well known. He ran the 
Judiciary Committee under my jurisdiction.
  On the other side of the enforcement equation, we are still waiting 
on nominations to the Federal Trade Commission. The FTC is an important 
agency that will play a central role in the years ahead. Whoever is put 
in charge will face the monumental task of setting the agency on the 
right track. I have supreme confidence that the President will make the 
right choice on this one, and I look forward to supporting his 
nominees.
  As these vacancies linger, however, uncertainty lingers as well. 
Critical merger and acquisition activity remains sidelined as 
innovation is chilled and expansions are put on hold. All of this comes 
at an unnecessary cost to our businesses and consumers.
  I want this whole body to hear me clearly: There is no need for the 
same old partisan food fight over our antitrust officials. Let's get 
Makan Delrahim to work. FTC nominations will likely include two 
Republicans and a Democrat. There is no reason they can't be swiftly 
confirmed as a package. If delay on these important confirmations 
persists, I will be back on the floor to make sure everyone--from 
consumers to industry--knows it.
  As I mentioned earlier, antitrust has been increasingly drawn into 
the broader public debate on economic and innovation policy, and not 
for the better. With each passing day, it seems the consumer welfare 
standard finds itself besieged from the left. Their rhetoric may not 
yet have made its way into traditional precedent, but it certainly has 
made itself known.
  Some in academia insist that recent market concentration and 
technological progress compel a return to bold, persistent 
experimentation. Many in the media call for antitrust to pursue 
everything from industrial democracy to campaign finance reform to 
material leveling. Above all else, we hear again the old, lazy mantras 
that big is bad, disruption is suspect, and public utility designation 
is welcome.
  Professor and former FTC Commissioner Joshua Wright has referred to 
this particular set of proposals as ``hipster antitrust.'' Well, as you 
might imagine, nobody would mistake me for a hipster. So for my part, 
and for ease, I will go ahead and call it the progressive standard. 
Truth be told, as a proposed replacement for the consumer welfare 
standard, the progressive standard leaves me deeply impressed. From 
what I can tell, it amounts to little more than pseudoeconomic 
demagoguery and anti-corporate paranoia.

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Nevertheless, it must not be dismissed out of hand.
  Over the last 8 years, policymakers laid the groundwork for it by 
routinely disregarding some of the most basic elements of the consumer 
welfare standard. Now we see the same stirrings of this radical 
approach in many speeches on the other side of the aisle, as well as in 
the recently released platform curiously titled ``A Better Deal.''
  As such, I believe a response is in order. In defense of the consumer 
welfare standard, we could, of course, run through the more technical 
deficiencies of the progressive standard. We can mention that as 
doctrine, it lacks manageable standards, dispensing with intellectual 
rigor and inviting political mischief. We can mention that as theory, 
it accounts for neither tradeoffs nor scarcity. We can mention that as 
aspiration, it subordinates the productive incentives of the 
entrepreneur to the fanciful designs of the bureaucrat.
  Truth be told, the real trouble for the progressive standard is, it 
fails to grasp the bigger picture of our history, economy, and national 
character. It fails to appreciate that our time is not so distinct from 
times past and that our momentary insights are not so superior to the 
lessons learned over generations prior.
  Of course, anyone can see that changes are afoot. As chairman of the 
Senate Republican High-Tech Task Force, I have seen it firsthand. The 
new technological age, having dawned in the late 20th century, 
continues to ripen into the 21st.
  New innovation is relentlessly spurring transformation across the 
economy, and many markets are concentrating as a result. Yet supporters 
of the progressive standard seem to think this presents historically 
unique problems. They rely, as academics are wont to do, on sleek, new 
jargon to argue that today's antitrust challenges are not only tangibly 
but conceptually distinct of those of the past. They argue, in other 
words, that things really are different this time around. At the end of 
the day, terms like ``platform economics'' and ``network effects''--
commonly used to attack the consumer welfare standard--do less to 
define new economic concepts than to explain how old economic concepts 
are manifesting themselves in modern markets.
  Through history, we have seen this time and time again. As the saying 
goes, the more things change, the more they stay the same. Markets 
concentrate and then disperse; dominant firms rise and then fall; with 
innovation comes creation in one sector and destruction in another. 
Anxiety over this evolution is very real, and the strident calls we 
hear to do something about it--whatever that may be--are on some level 
understandable, but this lurch toward the progressive standard is not.
  Change, sometimes furious change, is a constant in our system. For 
all its rancor, for all its chaos and uncertainty, it is, alas, what 
propels us forward. We hope, not fear, that each age looks better than 
the last.
  Now, in anticipation of an objection from my friends across the 
aisle, nobody is suggesting that no enforcement is necessary. Genuinely 
anti-competitive conduct must be stopped, and mergers prone to abet 
such conduct must be heavily scrutinized. That is all a part of keeping 
markets fair and free in the best tradition of American capitalism.
  Again, as I mentioned earlier, we should aim to regulate markets such 
that in their basic core functioning they regulate themselves. Market 
discipline imposed by competition and driven by innovation should be 
our aim. To that end, nobody doubts that new developments in the market 
will require a fresh look at doctrine. Nobody questions that the 
consumer welfare standard will have to adapt. For example, categories 
of anti-competitive conduct may need to be tweaked, refastened or even 
expanded in light of technical advancement and market evolution. Merger 
review, never an exact science, will seize upon new econometric tools 
for measuring ancient economic concepts like quality, preference, and 
efficiency. The rule of reason, I am sure, will continue to bedevil 
judges, practitioners, and law students alike, but that is just fine.
  Antitrust, as I keep saying, is ultimately a common law exercise. I 
am here to argue merely that the consumer welfare standard, when 
handled prudently, is a far better steward of our economy than the 
progressive standard, which is deeply misguided and potentially quite 
destructive.
  Take, for instance, the proposed Amazon-Whole Foods merger, which has 
generated so much interest lately. It would, of course, be 
inappropriate for me on the floor of the Senate to pass judgment. I 
would caution my colleagues the same. There is an established process 
for review, but the question should be asked: Upon what basis should 
antitrust authorities evaluate a proposed merger like this? What we 
need is the consumer welfare standard. It carefully examines the basic 
and critical question of whether such a deal helps consumers or whether 
it hurts consumers. It relies on a coherent doctrine to strike a 
balance. It is a balance between the merger's pro-competitive effects, 
such as integrative efficiencies and innovation, and the antitrust 
competitive potential, such as market domination by one firm or 
facilitated price coordination by the few that remain. What we 
absolutely do not need, on the other hand, is the progressive standard.
  Under no doctrinal limitations to cabin discretion, antitrust 
officials would gladly follow vague institutions in shifting 
intuitions. With a broad mandate to pursue aims far grander than mere 
market efficiency, officials would be free to engage in ad hoc 
theorizing about whether corporate consolidation, writ large, can be 
squared with universal justice, common fairness, and community values, 
or of whatever else their creativity recommends. To take another 
example, across the Atlantic, our friends in the European Union have 
leveled a massive fine against Google for anti-competitive conduct. 
Again, it is not for me to say on the floor whether those fines are 
justified. I don't think they are, but it is not for me to say.
  Once more, what we need is the framework provided by the consumer 
welfare standard. We must weigh the pro-competitive aspects of Google's 
conduct with its anti-competitive potential. The ultimate inquiry 
should be whether consumers are better off as a result of Google's 
actions. Under the progressive standard, however, instead of asking 
what lowers prices and increases quality--instead of considering actual 
proof of harm to consumers--we would be asking what best serves the 
social goals in vogue at the moment. The result would be an open 
invitation to market intervention that is more politically motivated 
than economically sound.
  In conclusion, for all the past rhetoric, for all the claims that a 
new age requires a new doctrine, the ideas behind the progressive 
standard are not new. They are terribly old. They may be adorned with 
original terminology or aimed at novel markets, but it is the same old 
collectivist impulse it has always been. In that sense, these ideas are 
not unique to Americans. Every day we receive concerning reports from 
around the world that foreign governments are increasingly turning to 
antitrust for industrial policy. Whether domestically or abroad, the 
stakes are simply too high, the consequences too grievous for the 
consumer welfare standard to be swept away in an instant, merely 
because a new breed of central planners--falsely conceiving themselves 
different from their predecessors--imagine they know best.
  In America, we have always opted for the invisible hand of the free 
market over the heavy hand of government intervention. Let's keep it 
that way.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. ROBERTS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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