Monday, April 13, 2009
Posted by D. Daniel Sokol
Greg Werden of DOJ-Antitrust has written some Essays on Consumer Welfare and Competition Policy.
ABSTRACT: The discourse on competition policy often uses the term "consumer welfare" but rarely is clear about its meaning or role. I address the meaning and role of "consumer welfare" in three discrete essays. The first reviews key economic concepts and the usage of the term "consumer welfare" then outlines distinct ways in which consumer welfare considerations could be relevant in competition law. The second essay examines the meaning and role of consumer welfare in merger control. It concludes that the welfare of all consumers should be considered, but short-term price effects in the relevant market nevertheless should be the initial focus in assessing proposed mergers. The third essay examines the meaning and role of consumer welfare in competition law on concerted practices and potentially exclusionary conduct by individual competitors. It concludes that promoting the welfare of all consumers is the ultimate goal of the law but effect on consumer welfare is not the test for legality nor generally even an appropriate guide for the application of the law.