Former Clinton Treasury Secretary Larry Summers has invented the label “hipster Branedeisians” for those who want to use antitrust to punish “greedy” corporations. Summers calls them “Branedeisian” because they are following the footsteps of progressive icon Justice Louis Brandeis, who championed government regulation of big companies.
He calls them “hipster” because increased enforcement of antitrust seems to have become the latest fad among progressives (as well as many conservatives) – and the fact that they look and sound ridiculous making these arguments.
Many of the hipster Brandeisians are calling for abandonment of the consumer welfare standard. The consumer welfare standard has been used to determine whether a business violated antitrust laws since the 1980s. The consumer welfare standard was championed by legal and economic scholars associated with the law and economic movement, most notably Judge Robert Bork. Judge Bork, and his colleagues, drew on legislative history and economic analysis to show that antitrust laws should only be used to stop activities that harm consumers. As Bork put it in his classic work The Antitrust Paradox, antitrust law, “necessarily implies a legislative decision that business units should prosper or decline, live or die according to their abilities to meet the desires of their consumers.”
Chair of the Federal Trade Commission (FTC), Lina Kahn, is leading an effort to replace the consumer welfare standard with a “holistic approach to identifying harms” by recognizing “… that workers and independent businesses in addition to consumers, can be harmed by antitrust and consumer protection violations.” The FTC is currently working with the Antitrust division of the Justice Department on new guidelines strengthening antitrust enforcement, which will no doubt adopt this “holistic” approach.
Commissioner Khan and her allies might be disappointed by the federal court’s treatment of any new guidance that disregards the consumer welfare standard. As George Washington law Professor Richard J Pierce, Jr pointed out in a recent article, “Important Changes in the Interseason of Antitrust and Regulation Law”, federal courts are applying a stricter standard of review to agency ‘guidance’ … if an agency relies on an old statute to take an unprecedented action that has substantial economic or political effects, a court will not defer to the agency nor uphold the action unless the agency can provide ’clear’ evidence that Congress authorized it to take the action.”
Replacing the consumer welfare standard (which reflects Congressional intent) could certainly be considered an “unprecedented action with substantial economic or political effects…” that could “…reasonably be considered to be outside the scope of the old statutes”
A rejection of any attempt by the FTC and the Justice Department to replace the consumer welfare standard does not mean the standard is safe. Hipster Branedeisians are found in Congress too, and not just in the progressive caucus. Centrists’ democrats such as Sen. Amy Klobuchar (Minn.) have embraced hipster Branedeisianism, as have conservative politicians such as Ted Cruz and Josh Hawley, these conservatives want to use antirust as a way to punish “big tech.” They agree with Commissioner Khan that the large tech companies are so influential they are a threat to democracy. Some even join Commissioner Khan in calling for tech companies to be treated as public utilities. These hipster Branedeisians of the right should ask themselves if giving progressives like Lina Khan new powers will make tech companies more willing or less willing to give conservatives unfettered access to their platforms.
All hipster Branedeisians should also ask themselves why, if big tech companies are invulnerable to competition, that new tech companies – many of whom are marketing themselves as more pro-free speech than the existing big tech companies – are emerging to challenge the bigger, established companies. They should also remember that history is full of companies that once seemed invulnerable eventually – and usually quickly - fell to market competition. Maybe the American people do not need Lina Khan (or Ted Cruz and Josh Hawley) to protect our democracy by regulating the options available to consumers online.
And, as if on cue, Elon Musk’s recent acquisition of enough Twitter stock to make him the company’s largest individual shareholder is a perfect example of how markets work and why the government should stay out of the problem. Musk saw a company in trouble, after gaffes like kicking President Trump and others off their platform while allowing others with even more extreme views – but on the left – to keep their accounts. He took the opportunity to buy shares – and immediately turned around and asked users what they thought – and in turn raised the value of the company back up more than 20%. Take that, hipsters.