Penn Wharton Public Policy Initiative

Publication Date

9-19-2018

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Volume

6

Number

8

Document Type

Brief

Summary

Modern antitrust policy follows the consumer welfare principle (CWP), the proposition that antitrust policy should encourage markets to produce high output consistent with sustainable competition, and low prices. The market dominance of giant firms such as Amazon, however, is opening the door to a reevaluation of this antitrust standard, particularly from a new antitrust “movement” that has economic goals, such as protecting small businesses and controlling runaway profits, that can be at odds with promoting low prices. Penn Law and Wharton Professor Herbert Hovencamp evaluates the merits of three antitrust frameworks within the context of the law and economic history. While he acknowledges that business can cause harm to the lives of Americans in ways that extend beyond inflating prices—i.e., creating barriers to market entry, stifling innovation, controlling information, or limiting wages—he argues that the CWP remains best positioned to respond to antitrust problems, although it would benefit from technical improvements.

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Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License

View on Penn Wharton PPI Website

https://whr.tn/IssueBriefV6N8

Keywords

competition, dominance, market, welfare, amazon, at&t, regulation, facebook, consumer, apple, predatory pricing, Microsoft, antitrust, oligopolies, monopolies

Antitrust in 2018: The Meaning of Consumer Welfare Now

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