Consumer Welfare and the Competitive Process

Francesco Ducci (Western University)


Should antitrust promote economic welfare or protect the competitive process itself? Defenders of the ‘consumer welfare standard’ contend that the law should maximize a welfare outcome, while critics suggest that antitrust policy should instead adopt a standard that focuses on the preservation of the ‘competitive process’. This paper argues that both answers are incomplete and share an underlying conceptual fallacy: conflating normative goals with legal tests for anticompetitive conduct and liability. First, the paper shows that a consumer welfare goal does not automatically translate into legal tests based on consumer surplus. Rather, an element of process is already embedded in antitrust liability under the consumer welfare standard. Second, the paper argues that approaches seeking to adopt the competitive process both as a goal and a legality test remain normatively indeterminate and fail to provide a coherent alternative. Emphasis on process, however, has a valuable role in redirecting antitrust debates toward reassessing the optimal balance of error-costs. Often, legal doctrines favor the avoidance of Type I errors even when dynamic efficiency may council greater concerns for Type II errors. From this perspective, the problem of the consumer welfare standard is not a lack of concern for process, but the very notion of competitive process that it already embeds.

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