To many at the Federal Trade Commission and Department of Justice, it feels like nearly every merger or acquisition is a bad one. Fortunately for American consumers, which often benefit from economies of scale and more efficient businesses, that’s not an opinion shared by the courts—but maybe not for long if Senator Amy Klobuchar (D-MN) gets her way. She wants to change the rules… again.

Senator Klobuchar first introduced the Competition and Antitrust Law Enforcement Reform Act (CALERA) in 2021, before re-introducing it again last month. CALERA makes it easier to sue and win in court by changing the criteria of an illegal merger from whether it will “substantially lessen competition” to a much broader test of whether it will “create an appreciable risk of materially lessening competition.” And if that does not stack the deck enough, CALERA also arbitrarily shifts the burden of proof in some cases from the government onto industry, where businesses must receive a permission slip from Uncle Sam before engaging in even pro-competitive market activity.

This development is more alarming than it is surprising, if only because the antirust revolution within federal agencies has not been met with an agreeable American court system. 

As a recent study by the American Consumer Institute (ACI) explains, the Biden administration’s approach to antitrust has been ineffective, at best, and a disaster at worst. The rate of litigation has doubled under the administration but success rates in the courtroom are down by more than a third. Institutionalized hostility has led firms to abandon economically efficient and consumer-friendly mergers, and has forced them into contentious court battles where they must contend with novel legal theories and uncertain argumentation. CALERA makes this poor state of affairs even worse.

Instead of trying to re-write the rules, competition enforcement agencies should return to what has worked for nearly four decades: the consumer welfare standard. By judging merger cases on economic outcomes like prices, output, and innovation, instead of assuming that any merger is always harmful, the consumer welfare standard puts consumer interests first—and it helps insulate the courts from political bias.

Senator Klobuchar surely believes that CALERA will increase competition and help consumers—but that’s unlikely. Mergers often lead to economies of scale, where larger operations reduce costs that businesses can then pass on to consumers or invest in better products and services. Blocking those market processes, unfortunately, often props up inefficient businesses, and sometimes even reduces competition, innovation, and product quality.

Amazon’s acquisition of Whole Foods, for example, actually led to lower prices for staple items like brown eggs and almond butter. Post-merger prices in the often-maligned airline industry continue to fall, even as the number of competitors declines. In fact, agency meddling in the airline industry may prove to be the bigger problem. Since a federal judge blocked the JetBlue-Spirit merger after the Department of Justice lawsuit under concerns that it would reduce competition, Spirit airlines has furloughed 260 pilots as JetBlue continues to shrink. None of that is good for competition or consumers.

The consumer welfare standard has been good for American consumers and innovators. By removing political subjectivity, it has been good for the rule of law and those who cherish objective legal enforcement. It has increased trust, established clear standards, and garnered decades of bipartisan support.  The only thing it hasn’t done is stop critics from trying to destroy it.

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Trey Price is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.