Today, the American Consumer Institute released a ConsumerGram that discusses the recent push to revise and create stricter antitrust laws that target dominant technology companies. The ConsumerGram outlines the economic thinking on competition and market concentration, and it discusses the widespread beliefs among mainstream economists that market concentration and structure are not necessarily sufficient to warrant the imposition of stricter antitrust regulations.
In this ConsumerGram Steve Pociask dispels the notion that the existence of large firms in certain markets will harm consumers. He writes, “is the diffusion of market power across a handful of large firms more concerning than concentrating all of that power in the hands of a single government agency?”
His work shows that large companies can, in many cases, “increase productivity and lower consumer prices” for consumers. “The key to antitrust enforcement,” he writes, “is whether consumer welfare is lessened.” He concludes that retaining a consumer welfare test is essential to justifying any antitrust actions.
ACI’s latest ConsumerGram should serve as a warning to lawmakers and federal regulators not to rush ahead and make antitrust laws overly strict without first considering the harm that blanket restrictions may have on consumers. In the end, these regulations should be about making consumers better off, not worse off.
You can read the ConsumerGram online.