In “Antitrust: What Counts as Consumer Welfare?,” James G. Dinan University Professor Herbert Hovenkamp explores antitrust’s consumer welfare principle and proposes it is “best understood as pursuing a maximum output consistent with sustainable competition.”
Hovenkamp observes that the principle is accepted by many scholars as well as the entire Supreme Court, though its definition is not as widely accepted.
“For example,” writes Hovenkamp, “some members of the Supreme Court can simultaneously acknowledge the antitrust consumer welfare principle even as they approve practices that result in immediate, obvious, and substantial consumer harm.”
Still, Hovenkamp maintains, for antitrust law to be effective in stopping injurious competition, we need a “properly defined consumer welfare principle.” Hovenkamp writes that output as opposed to price should be the relevant variable in forming this principle.
“Higher output benefits not only consumers, but also workers and most of the smaller firms that are affected,” Hovenkamp writes.
Hovenkamp, who holds a joint appointment in the Wharton School, is a Fellow of the American Academy of Arts and Sciences. In 2008, he won the Justice Department’s John Sherman Award for his lifetime contributions to antitrust law, and in 2012, he served on the ABA’s Committee to advise the President-elect on antitrust matters.
His principal writing includes The Opening of American Law: Neoclassical Legal Thought, 1870-1970 (Oxford, 2015); Antitrust Law (formerly with Phillip E. Areeda and Donald F. Turner) (22 vols., Aspen 2008-18); Principles of Antitrust (West, 2017); Creation Without Restraint: Promoting Liberty and Rivalry in Innovation (Oxford, 2012, with Bohannan); The Making of Competition Policy (Oxford, 2012, with Crane); The Antitrust Enterprise: Principle and Execution (Harvard, 2006); Federal Antitrust Policy: The Law of Competition and Its Practice (West, 5th ed. 2015); IP and Antitrust (2 vols., Aspen, 2017, with Janis, Lemley, Leslie, and Carrier); and Enterprise and American Law, 1836-1937 (Harvard, 1991).
He has consulted on numerous antitrust cases for various government entities and private plaintiffs and has also co-authored casebooks in antitrust, property law, and a free open source casebook on innovation and competition policy.
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