Competition Law in Practice
What Should Competition Law Protect?
The debate between the consumer welfare standard and newer views that competition law should also address the power of big companies, workers and democracy.
What is competition law for? This question has become one of the liveliest debates in economic policy.
The consumer welfare standard
From the late 1970s, U.S. antitrust law was heavily influenced by Robert Bork, whose 1978 book The Antitrust Paradox argued that antitrust should focus on consumer welfare, mainly meaning lower prices and higher output.
In this view:
- Big companies are fine if they deliver low prices.
- Mergers should be allowed unless they are likely to raise prices.
- Enforcement should be based on economic evidence.
This approach, associated with the Chicago school, dominated for decades and influenced many countries.
The neo-Brandeisian challenge
In the 2010s, a group of scholars, sometimes called neo-Brandeisians after U.S. Supreme Court Justice Louis Brandeis, who warned about the “curse of bigness”, argued the consumer welfare standard was too narrow. Lina Khan, whose 2017 article Amazon’s Antitrust Paradox became famous, later chaired the U.S. Federal Trade Commission from 2021 to 2025.
They argue competition law should also consider:
- Free services: digital products are often free, so price effects miss harms such as reduced privacy or quality.
- Workers: employers with market power can hold down wages.
- Suppliers and small businesses.
- Concentration of power and its effects on democracy.
Critics of the new approach
Supporters of the consumer welfare standard worry that broader goals are vague, could lead to arbitrary enforcement and could protect inefficient competitors rather than competition.
India’s law
India’s Competition Act already has broad goals: preventing practices harmful to competition, promoting and sustaining competition, protecting consumers’ interests and ensuring freedom of trade for other market participants. The CCI has considered issues such as privacy and fairness to small businesses.
A popular messaging app is free to use. A traditional view might see no consumer harm since the price is zero. A broader view asks whether users are paying with their data and privacy, and whether rivals offering better privacy are being shut out.
The goals of competition law have shifted over time and remain debated. Different countries balance consumer prices, fairness and power differently.
- The consumer welfare standard, associated with Robert Bork, focuses on prices and output.
- Neo-Brandeisians, including Lina Khan, argue for considering workers, privacy and power.
- Critics worry broader goals are vague and could protect inefficient firms.
- India's law includes consumer interests and freedom of trade among its goals.
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