Eleanor Fox writes that there is a paradigm shift in United States antitrust, but it is not to Neo-Brandeisian social policy. Rather, it is a rejection of neoliberal principles that have prevented effective antitrust regulation for decades. The shift has the support of a broad segment of society, from centrists to progressives, Neo-Brandeisians, and the new “Khanservatives.”
This article is part of a symposium studying the “paradigm shift” in antitrust scholarship and policy. Inspired by philosopher Thomas Kuhn’s work on progress in science, this symposium asks if and how the tenures of Federal Trade Commission Chair Lina Khan, Department of Justice Assistant Attorney General Jonathan Kanter, and scholarship associated with the antimonopoly or Neo-Brandeisian movement has changed how we understand the priorities of antitrust enforcement, evidence of anticompetitive harm, and the study and enforcement of antitrust more broadly. Over the next few days, we will publish contributions from Tim Brennan, Eleanor Fox, Daniel Francis, Andrew Gavil, Richard Markovits, John Mayo, Steven Salop, and Randy Stutz. You can read the previously published articles here. ProMarket encourages our readers to respond to the symposium and the ideas these scholars put forth with their own. Responses can be sent to ProMarket@chicagobooth.edu.
What will be the legacy of Biden antitrust? Has there been a paradigm shift?
I focus here on one discrete shift of consensus. It is not from traditional antitrust to Neo-Brandeisian antitrust. Rather, it is from neoliberal antitrust to antitrust without neoliberal premises.
Preceded by a growing discontent with the paper tiger of antitrust, the Biden administration has delivered a powerful blow to the neoliberal leanings of the law. The blow, mightily enabled by enforcers and scholars of the pre-Biden era, has been dealt by the Biden antitrust plank of aggressive enforcement (almost all on traditional market grounds), private enforcement, bipartisan state enforcement, and Biden administration rhetoric that has brought the debate from an inside-the-beltway conversation among technocrats to a public issue. Consensus has shifted from a blind trust in business and the market to a realistic appraisal that markets do not (almost) always work, they do not tend to self-correct, businesses do gain and exercise power, and businesses’ rosy narrative about the good they bring to markets and consumers deserves a healthy skepticism.
The critics of Biden antitrust focus on the enforcers’ socio-political agenda, often called the Neo-Brandeisian agenda: using antitrust to protect small business, workers, and farmers, and to break up big business. This focus distracts from the heart of the antitrust agencies’ work—which is more aggressive enforcement on market terms (not non-market social values). More aggressive enforcement necessarily entails overturning the neoliberal presumptions in the law—a project that has wide support in both expert and non-expert communities, and is considerably nonpartisan.
The paradigm shift is, however, a qualified shift, for the United States Supreme Court majority is not on board, and Congress cannot be expected to adopt legislation to match the law to the common understanding.
U.S. antitrust was assuredly not neoliberal in its origins. It was not neoliberal for almost all of its first century. Embrace of neoliberalism began early in the 1980s with the incoming Reagan administration, and the law clung to the laissez faire premises (variously also called neoliberal, Chicago School, or Washington Consensus), long after the world declared that the Washington Consensus was dead. Through the years, many enforcers at both the Department of Justice and the Federal Trade Commission fought the neoliberal paradigm from a centrist platform, but they did not divert the trajectory of the law.
Today, we are on the cusp of a new shift. By the new millennium, the digital economy had emerged, and, with it, the Big Tech gatekeepers. The new digital giants provided big benefits but presented huge social and economic perils. In the antitrust space alone, there was an outpouring of literature to the effect that: antitrust is standing by while the economy is concentrating, the elites are getting richer, inequality is growing, and neither the market nor antitrust is working for the people.
The Neo-Brandeisian movement articulated this narrative. It called out the feebleness of the law to grapple with the economic realities of private power. But it was not alone. So too have numerous experts and policymakers who are not Neo-Brandeisians. They are a diverse group. they may identify as traditionalists, progressives, centrists, or even conservatives. They may vociferously condemn Neo-Brandeisianism.
Joe Biden, elected president in 2020, laid out in 2021 a plan to reverse the “dangerous” trends of economic consolidation and exploitation in his Executive Order on Promoting Competition. He appointed Jonathan Kanter and Lina Khan to do the job for antitrust. They and their teams at the DOJ and FTC, respectively, have made headway in exposing neoliberal antitrust. While some of their projects and rhetoric also invoke social goals, that thread of their tenure is not a part of this article, which is focused on the Biden enforcers’ commitment to making markets work.
This article explores: 1) What was/is the old paradigm? 2) What does the new paradigm entail? And 3) Can there really be a paradigm shift while the Supreme Court is an outlier?
The Old Paradigm
The old paradigm of neoliberal antitrust comprises the following elements (well known to most readers but necessary to set the stage): Markets work (if government stays out) and are self-correcting. Business is efficient and is the only reliable source of knowledge, skill and insight into being efficient. Businesses may try to gain and use market power, but that is a Sisyphean task; the market will catch them. Market power is especially hard to obtain absent a cartel or government action. Government (including antitrust enforcement) is inefficient, clumsy, and prone to protecting inefficient firms from competition and chilling incentives to compete and innovate. Therefore, antitrust should take a light hand in disciplining business, and should be especially reluctant to invoke the law against unilateral conduct (monopolization).
The rules and standards of U.S. antitrust derive from this hidden core of presumptions about markets and the state.
The Shift
The shift away from the Washington Consensus is not just an antitrust phenomenon. It was not even led by antitrust. The chinks in the armor of the Washington Consensus began to appear not long after the industrial West imposed the Washington Consensus on developing countries in the 1980s, producing unemployment and unrest in the absence of pro-poor and local-specific policies. Washington Consensus lost luster in the world at about the turn of the twenty-first century. It lost most of its remaining vitality in the financial crisis of 2007-08. A year ago, David Wallace-Wells wrote in the New York Times: “America’s ‘Neoliberal’ Consensus Might Finally be Dead.” The New Statesman was even more definitive: “The Washington Consensus is dead.” These observations were made in a macroeconomic context. Antitrust is the microeconomic counterpart of the Washington Consensus—a connection that surprisingly seems not to have been made in the halls of antitrust.
Stirrings of discontent with the prevailing antitrust consensus began in the early 2000s. Neo-Brandeisians shined a spotlight on corporate power. They argued that antitrust had been co-opted by corporate power for 40 years; that monopolies were everywhere—especially among the ranks of Big Tech; and that the consumer welfare guide to antitrust analysis was a cover for the status quo.
Meanwhile, centrists and traditional progressives (collectively called “centrists” hereafter)—quieter and lower profile, debated antitrust conservatism in technological terms. They were and are equally determined to take the laissez faire premises out of U.S. antitrust. But they are not aligned with Neo-Brandeisians, not on board with the use of antitrust to protect small business, not hostile to big business, and adamant to save the consumer welfare standard or a version of it that rejects antitrust as social-political policy.
It has taken these two schools (although antagonists) to spotlight and excise Washington Consensus antitrust from the common understanding.
Curiously, as time went on, the Biden administration took power, and Lina Khan became the icon for the movement to rein in corporate power, a faction of powerful Republicans joined the mission. As the Wall Street Journal reported on March 25, 2024, “Khanservatives, as they call themselves,” are a growing contingent in the Republican Party. They “tend to be younger and Trumpier ….” They “question unfettered markets and see big corporations as an adversary to their constituents.” Florida representative Matt Gaetz told the Wall Street Journal in the same article that his party “can’t be whores for big business and be the voice of the working class at the same time.” The article continues: “The bipartisan traction suggests Khan is tapping into a generational shift in attitudes toward corporations and markets.” The Heritage Foundation’s Project 2025, which is an available guidebook for the coming Trump administration, echoes big business skepticism. In its section on the FTC, Project 2025 states:
“We are witnessing in today’s markets the use of economic power—often market and perhaps even monopoly power—to undermine democratic institutions and civil society ….”
Pushing the New Paradigm
To understand the Biden enforcers’ commitment to aggressive antitrust on market grounds,it is necessary to look closely at what the Biden enforcers have done and are doing. To be sure, they are working in other than pro-market spaces. The FTC issued a major policy statement on unfair methods of competition and issued a contested rule against non-compete clauses in employment contracts. That, however, is not where the lasting legacy lies. Two major aspects of the Biden enforcers’ work are indicative of their fight for stronger antitrust on market terms: the cases they bring, and the Merger Guidelines.
a. The cases
Virtually all of the complaints that the Biden enforcers have filed allege traditional violations. It is not true, as critics assert, that the Biden enforcers have abandoned the consumer. The complaints all pinpoint consumer harm except in the cases that concern only upstream restraints (such as anticompetitive practices in labor markets), and even then they allege traditional market harms: growth and use of market power to suppress competition. In court and on motions, the Biden enforcers back up their arguments with modern court decisions, even while also invoking earlier ones. When economic expertise is necessary, they choose distinguished economists who are well reputed as experts.
When the FTC sued Amazon for monopolizing segments of the online marketplace, it did not allege harms from low prices, as did Khan in her famous article published while she was a law student at Yale, Amazon’s Antitrust Paradox.The FTC alleged high-price harms to consumers from Amazon’s practices on its platform, such as punishing rivals who charge lower prices elsewhere. The FTC and the DOJ have pending cases against all of the Big Tech gatekeepers, with two of the most important inherited from the Trump administration. All allege harms to consumers.
The agencies have presented novel theories and have invoked old Supreme Court case law. For example, in the case of Meta’s acquisition of Within, a leading virtual reality fitness app developer, the FTC invoked a 1970s Supreme Court case on loss of future competition. While the FTC failed to prove its factual case—that Meta would probably have entered the virtual fitness market and added competition but for the acquisition—the court endorsed the FTC’s roadmap and paved the way for challenges to mergers based on loss of future (potential) competition, even in nascent markets. In the case of the DOJ and states against Google for monopolization of the search market, the DOJ pursued a substantially traditional case—with cutting edge foreclosure aspects—against Google for paying device makers billions of dollars a year for the exclusive right to preload Google Search as the default on their devices. Google had tied up the most efficient avenues for entry and expansion of rivals; and the DOJ won at trial.
Amazon, Meta/Within, and Google Search are representative of the federal government enforcement agenda. The cases were all brought on grounds of harm to the market.
b. The 2023 Merger Guidelines
The 2023 Merger Guidelines tell a similar story of trying to make the law more aggressive and to excise the conservative perspective, all within a pro-market context. Looking back, we recall that The DOJ issued its first merger guidelines in 1968, pulling together lessons from the Supreme Court merger cases. The 1960s’ and early 1970s’ Supreme Court cases were tough on mergers. The Reagan revolution reversed the trajectory with the 1982 Merger Guidelines, inexplicably dropping entirely the principal theory of harm in the preceding decades—the direct elimination of the competition between leading rivals. (The concern was finally brought back as unilateral effects.) In the years to follow, the antitrust agencies updated the merger guidelines by increments. But progress on margins does not normally effect discernible change. The Biden officials set out to change the narrative.
The 2023 Merger Guidelines are solely about market harms; not about protecting small business, even if at some points the feared market harms may be speculative and the precautionary principle too wide. The labor market coverage of the 2023 guidelines is not neo-Brandeis but is an elaboration of the labor concern raised in the preceding (2010) guidelines; it is based on market analysis. Critics of the 2023 Merger Guidelines complain that thresholds for concern about market concentration are too low, that burdens are shifted too easily, and that new issues, such as extending dominance to an adjacent market, are raised without guardrails. Each of these points can be debated within the technical frame of what is good aggressive merger analysis.
In sum, aggressive antitrust on its own market terms—which means stripping away the neoliberal perspective—is a major feature of Biden enforcers’ antitrust. It is as well a major plank of the centrists.
For the 41 years before 2023, the merger guidelines were aligned with a perception that big mergers, even by leading firms, were generally good for productivity and consumers. The 2023 Merger Guidelines are not. Some expert commentators assessing the landscape in these months before the change of administration are predicting that the Trump enforcers will immediately withdraw the 2023 Merger Guidelines. This article predicts retention of the guidelines, perhaps with some guardrails announced in policy speeches and a greater emphasis on economics, for the new administration has signaled that it will be more friendly to business and will find a way to get most deals done. The new administration’s early attitude towards the 2023 Merger Guidelines may be a litmus test of the Biden antitrust legacy.
Conclusion: Lasting Legacy?
The Washington Consensus presumptions and assumptions are summarized in part II, above. The new consensus repudiates every one of them.
The sum of the two schools or movements described in this article has changed the conversation in a lasting way. Laissez faire ideologies have been exposed not only as inaccurately depicting economic reality, but also as tilting the scales in favor of elites and against the people.
The members of the new consensus must, however, deal with the inconvenient fact that the laissez faire premises are baked into the base of substantive U.S. antitrust law. The specific antitrust rules of law—on predation, on refusals to deal, on exclusionary practices—all derive from the base. And the Supreme Court is not likely to change these foundational premises.
Is there still room to claim that consensus has shifted in a meaningful way? Four reasons support a cautious yes.
First, the shift is a qualified shift.
Second, laissez faire philosophy as an ideology to underlie law has been significantly rejected in the United States and most of the world. U.S. antitrust is just now catching up. This phenomenon is bound to affect thinking and analysis, including by the judiciary.
Third, one can take on the mantle of Assistant Attorney General Kanter and declare: We do the best we can in the context we find. As Kanter vowed, the DOJ looks for and develops the best facts, and, wherever possible, factually distinguishes the neoliberal Supreme Court precedents. Good facts go a long way. Well-articulated complaints that tell a compelling story in plain English go a long way.
Fourth, a prominent contingent of the Republican Party, including Vice President-elect J.D. Vance, is a part of the new qualified consensus.
Fifth, U.S. antitrust enforcers now speak the same language on power and its abuse as do their counterparts around the world. Although consensus of the community is no match for the opinions of the Supreme Court, the U.S. is finally back in the world conversation.
Author’s Note: The author thanks Harry First and Daniel Francis for their very helpful comments.
Author Disclosure: the author reports no conflicts of interest. You can read our disclosure policy here.
A longer form of this article appears in Concurrences Review in On-Topic, US Elections 2024, under the title, “A lasting Legacy of the Biden Administration: Excising neoliberalism from US antitrust,” Oct. 11, 2024.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
