Antitrust as Public Interest Law: Redistribution,Equity,and Social Justice

A. Part I. Reject Efficiency-Only Goal of Antitrust

Efficiency and perfect competition, considered pillars of the global economy, are ingrained in our understanding of how the global and thereby the local economy and its markets should be organized.

Although the goals of competition laws cover a wide range of objectives, each leading to a different outcome, ⁵ the most widespread modern or mainstream goal of competition enforcement is allocative efficiency, which is also termed “consumer welfare.” ⁶ It is a static goal and in economic terms, it is termed “consumer surplus”—which measures the difference between what consumers were willing to pay for a good and what they actually paid (also known as wealth maximization). The ideal that is desired, namely a maximization of consumer welfare, is achieved when market prices are equal to the marginal cost of production; a situation that prevails under perfect competition. As soon as we move away from the perfect competition ideal, prices increase and consumer welfare decreases. A monopolist charging monopoly prices will result in reducing consumer welfare and creating a deadweight loss (DWL) to society, namely wasted resources that could have been employed but are not.

Consumer welfare, understood as allocative efficiency, is maximized when markets are perfectly competitive. Perfect competition forces prices down to the marginal cost of production and assures that societies’ resources are allocated in the most efficient way possible. To achieve perfect competition, market entry is encouraged leading to an increasing number of competitors with the desire to force prices downward to ultimately be equal to the marginal cost of production. The economic theory suggests that prices above marginal cost signal the profitability of market entry, thereby enticing new players—local, foreign, small, and large—to enter the market. No intervention, whatsoever, is needed; except to assure that prices are set freely.

In other words, the only kind of protections accepted are those of the free functioning of the market. This is guaranteed through the legal apparatus, that assures the protection of the freedom of contractual arrangements and the sacredness of private property. All actors are then simply interpreting pricing signals to enter or exit, to buy or sell, and so forth. In addition, their interactions, their buying and selling, determine the prices that then signal the next round of actions. These cyclical turns will keep the market hovering around the ideal of perfect competition—unless the market fails to operate in that manner. In the case of market failures, such as cartelization or abuse of dominance, antitrust laws come in to restore the market in its perfect competition ideal.

This neoclassical economic rhetoric of the ideal of allocative efficiency in perfectly competitive markets has guided modern antitrust enforcement in the North and South alike. Despite several critiques levied against it, ⁷ it remains the most cited goal of competition enforcement. ⁸

In pursuing allocative efficiency, distribution is ignored. The only focus is on efficiency, and making the pie bigger, not how it is divided. The assumption is that tax and transfers can later undo the inequalities generated when efficiency was pursued. This furthers income gaps and increases inequalities even more—making the rich richer and the poor poorer. It entrenches a political economy that favors the ruling elite, discriminates against the masses, and widens the disparity of wealth.

If we are concerned with inequality, then the focus of antitrust on efficiency needs to be relaxed in favor of non-efficiency-based goals, which have distributional objectives. Antitrust goals that are more suitable to address inequality and alleviate the income gaps would embrace distributional concerns. These distributional concerns are often ignored and are rarely considered important policy questions to be achieved with antitrust enforcement. Nonetheless, some scholars have continued to raise the importance of using the antitrust laws in ways that aim at social justice. For example, Eleanor Fox has called for widening the scope of antitrust as a tool for mobility and poverty eradication as part of a broader context of developing economies. ⁹ She argued that antitrust laws could drive prices down and eliminate barriers, especially for basic necessities, which can help the poorest members of society. ¹⁰ As a result, businesses could afford better inputs, enabling domestic businesses to compete in the global economy. ¹¹ Fox writes:

Market tools are a very important part of the panoply of tools needed to address world poverty and should be used liberally. These market tools include market-freeing measures that reduce prices. They also include antitrust priority-setting that targets conspiracies that raise the price of staples, such as milk, bread, transportation and utilities, helping the poor as well as those who are better off. ¹²

Nevertheless, scholars often argue that competition law should not concern itself with redistributional goals, ¹⁶ which should be left to government action specifically tailored to address such issues. ¹⁷ However, most countries, especially developing countries with benevolent governments, fail to introduce or implement such policies. Taxes are frequently evaded, or paid taxes fail to reach those in need. Also, subsidies continue to be lifted under the rubric of privatization and liberalization, leaving the masses at a loss. This often leads to the entrenchment of local structures of cronyism, statism, corruption, and further income inequality. Thus, broadening the scope of antitrust to include issues such as poverty eradication seems appealing as a policy framework.

Similarly, antitrust can be broadened further to aim at issues as broad as fairness and equality. Both goals would reduce global inequality. A number of jurisdictions recognize the promotion of fairness and equality as one of their antitrust laws’ objectives. A few scholars argue that such fairness goals are desirable competition policy frameworks, particularly Eleanor Fox who has written that “some goals are more important than efficiency. Achieving a more equitable distribution of opportunity may be such a goal.” ¹⁸

One of the often-cited examples is South Africa, which states that its competition law considers a “broader range of considerations including the promotion of a more equitable spread of ownership as well as the ‘interests’ of workers.” ¹⁹ According to its competition law, “the purpose of this Act is to promote and maintain competition in the Republic in order to [among other goals] promote a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged persons.” ²⁰ According to the Act, one may be deemed a historically disadvantaged person “if that person…is one of a category of individuals who, before the Constitution of the Republic of South Africa…came into operation [in 1993], were disadvantaged by unfair discrimination on the basis of race….” ²¹ This definition also applies to associations where the majority members are considered historically disadvantaged as well as to firms controlled by such individuals. ²² This is an important goal to a country like South Africa where its majority has been discriminated against through most of its history.

In another attempt to promote equality, the South African Competition Act states that the Competition Commission may exempt an agreement or practice from the application of its competition rules if it contributed to the “promotion of the ability of small businesses, or firms controlled or owned by historically disadvantaged persons, to become competitive.” ²³

Finally, the South African law furthers equality, fairness, and antidiscrimination by allowing a merger to be justified on public interest grounds. ²⁴ This provision explains that the Competition Commission or the Competition Tribunal must consider, among other things, the effect that the merger will have on “the ability of small businesses, or firms controlled or owned by historically disadvantaged persons, to become competitive.” ²⁵ The same provision applies when considering whether to exempt an agreement otherwise prohibited. ²⁶ The availability of such exemptions for certain agreements and mergers can be construed to mean that South Africans are sometimes willing to pay a higher price for goods and services as a cost of including the historically excluded segments of its population into the marketplace. ²⁷

Similar equity claims have been included in the Indonesian competition law, which is “infused with principles of equality of opportunity, fairness, equal treatment, and a leveling of advantage.” ²⁸ The inclusion of such equity claims is done against the backdrop of a society that has suffered from cronyism, nepotism, and corruption since its independence in 1945. ²⁹ Business was centralized in the hands of the friends of the government and the successful ethnic Chinese minority. ³⁰ When the competition law was adopted, it aimed at closing the social gap that had caused the economy to be uncompetitive, rearranging business activities so that they could grow in a fair manner and avoid the concentration of power around a certain person or group contradictory to the ideals of social justice. ³¹

Other equality considerations included in certain jurisdictions’ competition laws often address labor policies. For example, the German Competition law allows certain mergers, with prior approval by the Federal Minister for Economics, to be justified by an overriding public interest, such as labor and industrial policy considerations. ³² Also, the European Community (EC) competition law allows crisis cartels for social reasons. ³³

The examples of South Africa and Indonesia could be branded under an “antitrust as public interest” law, where the goal of antitrust is the realization of the public interest. However, the definition of the “public interest” saw radical narrowing to be currently aligned with consumer welfare. The next part illustrates how this development took place over the years. This is illustrated not only to present what antitrust used to be, drawing on its history, but mainly to present an alternative to what it currently is.

B. Part II. Frame Antitrust as Public Interest Law

The Sherman Act, although proclaimed to be about competition policy, has never been just about that. Since its enactment in 1890, property rights have been put at the center of the debates surrounding the definition of markets and legitimate behavior of market players. Not only does the Act take property rights as background rules presupposed to configure a competition policy, but it also lays out a conflict between competition policy and property rights. ³⁴ Rudolph Peritz has argued extensively that the antitrust law has been produced by a tension between competition policy and common law property rights. ³⁵ He illustrates the tension and how each defines the limit of the other while using a merger example: “on the one side, competition policy calls for the arrest of mergers that result in dominant firms. On the other, preventing owners from selling their business interferes with their fundamental right to sell their property.” ³⁶

The public interest emerges into this balance, between private rights and competition policy. The latter becomes clothed with the public interest as it is used to restrain private rights of property and contract. Nonetheless, it is important to highlight that the restrain on property and contract carried out through the application of the Sherman Act reaches beyond the goal of realizing simply a competitive market. Competition policy is used here as a catch-all phrase that also includes social objectives such as redistribution through, for instance, putting limitations on monopolistic prices or forcing the dissolution of a merger-to-dominance, thereby guaranteeing that market entry would not be inhibited, and equal access and equality of power would be assured.

Public interest was centered, at the time of the passing of the Sherman Act all through the 1930s, on the realization of benefits accruing to the society or community at large, including social objectives. This definition of the public interest has guided competition, regulatory, industrial organization, and distributive policy from the 1870s to the 1930s.

In the 1930s, the definition of the public interest was radically changed. This shift has been consolidated with the tenure of Thurman Arnold as the chief of the Antitrust Division of the Justice Department from 1938 to1942. Arnold upheld the symbol of the consumer and consumer welfare as the public interest, thereby ushering the later New Deal’s turn to antitrust instead of the early New Deal’s focus on corporatism. The First New Deal is generally associated with the National Industrial Recovery Act (NIRA), the Agricultural Adjustment Administration (AAA), and the promulgation of industry codes which replaced free-market competition. It was the first major effort to deal with the problems of industrial organization. ³⁷ These measures were put in place to recover from the Great Depression of 1929. The goal of the NIRA was to increase the prices and restrict production, create profits and restart business investment. ³⁸ Its aim was for prices, wages, and profits to be fair: neither too high nor too low. ³⁹ These initiatives led to what looked like government-sponsored cartels especially given the antitrust exemption for the action undertaken under the Recovery Act.

The First New Deal stands in contrast with the second, and one can claim that its failure was directly responsible for the rise of the Second New Deal (1935–1948). The latter saw a return to competition, the overruling of the standard of fair competition in the Schechter Poultry ⁴⁰ decision, and a focus on the consumer instead of the community at large. The Second New Deal “arose of the ashes of an organic body politic, still inspired by an ideology of relational equality but reshaped to accord with a new image—the consumer, representing a unified body economic.” ⁴¹

This new ideology of consumerism was emerging as a powerful force in Congress, the Federal Trade Commission (FTC), and the Antitrust Division. ⁴² Peritz argued that the Antitrust Division under Arnold “simply sought to carry the logic of efficiency and ideology of consumerism to their neoclassical conclusions.” ⁴³ This shift assured the demise of the political imagery, represented through the public interest as community wellbeing and fair competition, and its replacement by an economic imagery of the consumer and free competition. Thurman Arnold changed the entire focus of the New Deal from corporatist planning to competition as the fundamental economic policy of the Roosevelt administration. ⁴⁴

Arnold was an intriguing figure—called a “Foe of Capitalists,” a “Left-Wing New Dealer,” ⁴⁵ but also “not at all a Brandeisian progressive.” ⁴⁶ It also seemed odd that “the author of a savage satire on the antitrust laws should now be placed in charge of enforcing them.” ⁴⁷ On the one hand, he supported price controls and production quotas in agriculture, given the failure of competition there. While, on the other hand, he opposed the National Industrial Recovery Act (NIRA), as he saw businesses capable of bouncing back on their own. ⁴⁸ Arnold focused on public antitrust enforcement, instigating an extensive amount of civil and criminal cases—bringing nearly as many cases during his tenure as head of the Antitrust Division as in the prior fifty years the federal antitrust laws had been in existence. ⁴⁹ This led Hawley to write that Arnold’s “metamorphosis from cynical critic to militant trustbuster” as a difficult one to understand. ⁵⁰

Arnold chose cases that directly impacted American consumers—the chosen cases dealt with, among others, the following industries: motion picture, car producers, dairy, construction, tire manufacturing, fertilizers, newspapers, tobacco, shoes, and petroleum. Arnold’s antitrust program was oriented toward consumer benefit. ⁵¹ In one sentence, he summed up his aim: “The idea of antitrust laws is to create a situation in which competition compels the passing on to the consumers the savings of mass distribution and production.” ⁵²

Arnold was not only a firm believer in free competition but also a zealous protector of consumer welfare. The resulting jurisprudence mirrored the shifts the later New Deal instigated and Arnold’s reign cemented. Fair competition, statist central planning, cooperative industrial action, and the public interest encompassing more than consumer welfare, especially equality and redistribution, were policies of the past. The new era aspired the realization of consumer welfare and free competition as a means to realize it.

Arnold clearly stood for consumer interest, not the public interest as defined by early progressives and First New Dealers to encompass the community and society as a whole. Hawley described Arnold as “[having not much] sympathy with those who would sanction monopoly and regulate it in the public interest.” ⁵³ He was, therefore, a strict believer in the market and in the power of competition to sanction monopolies without the need to resort to the public interest doctrine to achieve that. Monopolies were efficient, if their power was amassed in an unregulated and free market. If the intervention was necessary, he believed only in the promotion of consumer welfare not the public interest as previously defined.

In contrast, progressives and First New Dealers supported the public interest, even if it meant the consumer was not necessarily benefiting, as long as the welfare of society as a whole was realized. For example, they might have supported that regulated rates resulted in higher prices than those under competitive markets—as long as the regulated rates entailed that the regulated industry would continue to grow and provide the necessary good or service benefiting the community. Under Arnold, the focus turned to the consumer, thereby, making his program an individualistic, instead of a collective one.

Without Thurman Arnold, there would have been no modern antitrust law, especially one that has the welfare of the consumer as its goal. He linked antitrust to consumer interests, and in doing so, he set the stage for modern antitrust law. ⁵⁴ His program was devout of its predecessors’ focus on fair competition, collectivism, collaboration, statism, equality, and redistribution. All of which were encompassed in a broad definition of the public interest, which, post-Arnold and the Second New Deal’s developments, became narrowly defined as consumer welfare—a definition that would prove helpful to the rise of the Chicago School’s antitrust.

It might seem ironic that the push toward competition and consumer welfare was actually a conservative push generating a shift to laissez-faire that sidelined the role of the state, redefined property, and had significant distributive consequences. After Arnold shifted the focus of the public interest from the community to consumers, the next significant narrowing of the public interest happened with the rise of the Chicago School in 1960.

By the 1960s, perfect competition became the ideal market structure, and the public interest to be sought with the application of competition law became consumer welfare. This slowly morphed to be known as allocative or economic efficiency—practical with the rise of the efficiency rhetoric. Robert Bork was responsible for this metamorphosis of the consumer welfare criterion, while Richard Posner was credited for asserting efficiency as the sole goal of antitrust. Posner has notably stated that:

Almost everyone professionally involved in antitrust today - whether as a litigator, prosecutor, judge, academic, or informed observer - not only agrees that the only goal of the antitrust laws should be to promote economic welfare, but also agrees on the essential tenets of economic theory that should be used to determine the consistency of specific business practices with that goal. ⁵⁵

Under Chicago’s influence, the focus shifted toward price theory, aided by the success of the framework laid out by Posner’s wealth maximization. Consumer welfare becomes identified with consumer surplus. Antitrust enforcement that cares about the maximization of consumer surplus will be intolerant toward activities that allow firms to raise prices, as this will automatically result in a reduction in consumer surplus. This goal becomes known as allocative efficiency, where prices and money become the denominators to measure whether the chosen efficiency standard has been realized.

While this was underway, Robert Bork handed the antitrust story one final twist. Robert Bork, in his Antitrust Paradox (1979), redefined consumer welfare to encompass the interests of both consumers and producers. His brilliance was that he used the term “consumer welfare,” which he used in an Orwellian term of “art that has little or nothing to do with the welfare of true consumers.” ⁵⁸ Bork’s “consumer welfare” better lends itself to be called total welfare or economic efficiency. ⁵⁹ Thanks to Bork’s choice of the term, the efficiency-only story came to rule antitrust. According to Robert Lande,

Bork’s brilliant but deceptive choice of the term “consumer welfare” as his talisman, instead of a more honest term like “total welfare,” “total utility,” or plain “total economic efficiency” [was the reason for the triumph of the efficiency-only goal of antitrust.] After all, who can be against “consumer welfare”? ⁶⁰

A total welfare standard implies the maximization of producer and consumer surplus (total surplus) to the extent that it outweighs any inefficient allocation of resources (DWL). It calls for an efficient allocation of resources as the sole goal of antitrust. ⁶³ For less strict followers of the Chicago School, consumer welfare meant allocative efficiency. This was heavily influenced by price theory rhetoric that dominated antitrust. Under this definition, promoting consumer welfare focuses on preventing the DWL triangle from emerging—that is, a desire for the economy to produce without any inefficient allocation of resources. ⁶⁴ The advocates for allocative efficiency as the goal of antitrust argue that consumer welfare is maximized through the efficient allocation of resources. ⁶⁵ This is achieved when “the existing stock of goods and productive output are allocated through the price system to those buyers who value them most, in terms of willingness to pay or willingness to forgo other consumption.” ⁶⁶

Allocative efficiency is commonly defined as Pareto optimality. ⁶⁷ This takes place when no other distribution could make at least one person better off without making someone else worse off. ⁶⁸ Pareto optimality is considered a static goal, as it is occupied with maximizing consumption value at a fixed point in time. ⁶⁹ Static allocative efficiency is accomplished when prices are set at equilibrium—that is, prices are set at the intersection of the supply and demand curves, implying price is equal to marginal cost. According to the first theorem of welfare economics, the market at competitive equilibrium will lead to Pareto-efficient allocation of resources. ⁷⁰

Both definitions of consumer welfare, either as allocative or economic efficiency, meant a radical narrowing of the welfare standard from that which reigned before the rise of the Chicago School, such as under Arnold’s program. Consumer welfare, rid from any efficiency connotation—as repeatedly argued by Lande—is to mean the prevention of wealth transfer, which is considered theft and takes place when “consumers [are forced] to pay supra-competitive prices.” ⁷¹ Accordingly, a consumer surplus standard better reflects society’s judgments about the appropriate distribution of economic welfare. ⁷²

The public interest initially moved away from a definition that included the benefits accruing to the community at large to a narrower focus on only the consumer; then moving to an even narrower focus on allocative or economic efficiency instead. This testified to the triumph of strict price theory which came to dominate antitrust. Peritz argued that “price theory’s rhetoric of “efficiency” and “consumer welfare” are not proxies for competition policy, which has traditionally embodied a bundle of social values. Plucking efficiency out of the bundle reflects a political judgment that requires an open debate, justification, and legitimate political action.” ⁷³

The choice to confine antitrust policy to price theory and efficiency standards, as Peritz argued, has been an evidently political choice. It is not a scientific one, as many of the economists of Chicago School have argued. Duncan Kennedy writes that the cost–benefit analysis at the root of the efficiency approach is incoherent, indeterminate, controversial, political, and has a bogus air of objectivity. ⁷⁴ This is due to a number of political choices, which are necessitated by an application of this methodology and which suffice to make it lose any objective, coherent and determinate pretensions. ⁷⁵ These political choices are summarized in Kennedy’s following quote:

The political decision-maker makes two initial choices: one about the distribution of factor shares, and a second about the initial definitions of entitlements. The economist then presents him a choice among the outcomes that are possible under costless bargaining on those assumptions. Each possible outcome consists of an allocation of resources and an associated distribution of welfare. The political decision-maker now makes a third intervention: He applies his social welfare function to decide among them. The economist then applies himself to the task of bringing this outcome to pass in the actual world of transaction costs. He manipulates entitlements and redistributes units of factors until the allocation of resources and the distribution of welfare correspond exactly to those chosen by his boss. At the end of the long day’s work, he can claim that the total rule system in place is the efficient one, given the three “noneconomic” prior decisions made politically. ⁷⁶

C. Part III. Antitrust as Public Interest Law to Address Inequality

As shown in the previous part, antitrust, framed as public interest law, allowed at a different historical moment a policy that was wide enough to encompass benefits accruing to society at large. Under that framing, antitrust is understood as a market tool that allows the realizing of goals that are much broader than the efficiency-only goals that dominate antitrust enforcement policy today.

The chosen objective of antitrust as public interest law is driven by a political decision that in reality has very little to do with law and/or the economics of the market. It is a decision that might reflect the dominant “consciousness” of the time, an amalgam of dominant legal and economic thought, power politics, and societies’ pressing needs. ⁷⁷ It might also be a decision that is challenging the dominant “consciousness” and proposes an alternative to the reigning mainstreamed objectives. In that latter vein, this part proposes to use antitrust to address inequality, a pressing need of our time.

Addressing inequality is an objective that enters the framing of antitrust as public interest law. In that framing, there is a conscious decision to engage a political choice that does not ascribe to the dominant discourse reigning at the moment—enforcing antitrust to promote efficiency; instead, it is used to alleviate inequality. If we go back to antitrust as public interest law referring to the community at large and not in its narrow sense to cover only consumers and thus revolve around efficiency, we shall be open to ways antitrust laws can be used to address inequality. I shall present one such way.

Today’s markets are characterized as highly concentrated, run by few firms that dominate, or even monopolize, our various local and international markets. This market structure does not only consolidate the means of production, wealth, and resources in the hands of the few, but it is also responsible for furthering inequality and increasing the income gap even more. Confronting this reality, antitrust aiming for alleviating inequality needs to acknowledge that the challenge of “bigness” is one that is at the heart of the problem.

However, the proposal I delineate next does not aim to challenge “bigness” per se. On the contrary, it is open to accepting that concentrated markets might be responsible for necessary innovation, employment, and growth. It is also not challenging bigness to work with the given market structure that realistically defines our markets today. It is, nonetheless, aiming to limit the inequality that bigness is responsible for. It is a proposal to regulate bigness, by working direct redistribution into the background rules of antitrust, to reduce global inequality.

This is done through a desired redistributive plan that is integrated into the market structuring legal rules and regulations themselves and is not simply factored in through the tax and transfer systems. Counting only on taxation is highly problematic—redistributive taxes aim at correcting the inequalities, yet do not address the core of the problem—namely, the rules and structures that have generated, and will continue to generate, the inequalities in the first place. Moreover, redistributive taxes do not always reach the people who need them the most or those that are affected by the rules at the root of their inequalities the most. Therefore, changing the rules of the game themselves will not only alleviate some of the inequalities of unregulated markets, but in the long run are bound to change how the market functions thereby reducing inequalities further.

Redistribution is introduced to force dominant firms to channel part of their rents to the consumers who buy their products. The aim of the proposed redistribution plan is to curb the power of these dominant firms and to force them to redistribute part of the surplus value or rents back to the consumers instead of prohibiting them from acquiring a dominant position. The reasons “bigness” are accepted are twofold. First, as mentioned before, bigness is a reality of our local and global markets. Little has been done so far to prohibit firms from acquiring these dominant positions—it is naive to assume that antitrust laws or regulations will change this reality. Second, it has been argued, especially for developing countries, that firms with dominant positions are necessary for industrialization, innovation, technological catchup, and growth. ⁷⁸

Accepting bigness and regulating it through a “forced” redistribution plan is the aim of this proposal. This can be done through the requirement that these firms fund, for example, a consumer trust from their surplus values that can in turn be selectively used to lower the prices paid by consumers. ⁷⁹ One would have to require that the dominant firms fund this trust through fixed cost efficiencies realized when they acquire market power. The idea is to translate fixed cost efficiencies into marginal cost reductions that directly benefit the consumers.

It could work in this way: The competition authority would allow the merged or dominant entity to raise prices only if every purchaser of the product will receive a “coupon” for the difference between the current price and the but-for price (i.e., the fair price without the overcharge). The consumers can only cash in their coupons after a certain time. The idea is that the merged firm may be allowed to “harm” consumers in the short run, only to achieve their promised efficiencies in terms of lowering their cost curves in a pre-set time frame, and then be required to give back to the consumers the realized efficiencies to offset their harm.

Through the consumer trust, consumers become de facto shareholders who are owed dividends at a certain time. Or, they become creditors who are owed their loans back at a certain time. Through the compulsory duty of funding the trust, the seller translates this loan to an investment benefiting the buyer in the trust. The mechanism can also be devised to allow for interest payable on every coupon received. If the firm fails to pay back its so-to-speak debts to the consumers, then the competition authority may liquidate the firm and use the sold assets to repay the consumers. This will be a driving force for the merged entities to achieve the promised efficiencies. ⁸⁰ It will also make the buyer a stakeholder who is owed more than just compensation for the higher price they paid. ⁸¹

This is of particular interest in developing countries if the cost efficiencies are generated through innovative improvements yet would have made consumers suffer. This model changes the background rules of competition law to take into account actual redistribution. ⁸² Here, all parties benefit.

Firms and producers can go ahead with their innovation-generating dominant positions, through mergers, collaborations, or protectionism; their novel market powers and higher prices are used to fund a consumer trust; and that is then redistributed back to the consumers, once their cost functions are indeed reduced. In the long run, the aim is that prices set by these firms would ultimately decline when they had realized more fixed cost savings through, for example, technological innovations made possible only through their post-dominance efforts. This underlines possible benefits that can accrue to buyers in concentrated markets. This is a further challenge to the mainstream positions regarding the absolute virtues of perfect competition.

Allowing firms to maintain their dominant position is sometimes a necessary development goal as part of an industrial policy ⁸³ or simply a reality of many countries today. ⁸⁴ Therefore, their ability to charge high prices, which is often a powerful tool they will exploit, can be conditioned on these compulsory duties of funding the trust that will be selectively enforced to benefit buyers.

Another way to perceive this plan is that the dominant enterprises are being socialized and embedded within a wider network that comprises consumers/citizens. These firms’ ownership is expanded to include the consumer/citizen as a stakeholder earning part of the surplus or rent generated by the firm. It can also be worked out to apply to workers, who are then funded out of a similar “worker trust” that is used to effectuate a rise in actual salaries, shortening of working hours, or unemployment benefits for those who, for example, lose their jobs following a merger. Taking workers into consideration in the antitrust analysis is crucial in expanding the reach of the public interest and reduction of inequalities.

These distributive objectives are achievable through the change in these background rules that organize these relationships between buyers/workers and sellers/producers/owners. They assure that equity is one of the issues considered and redistribution becomes an integral part of the economic analysis undertaken. This has serious ramifications for a competition policy that aims to work out alternatives that include the impoverished segments of society, and can be used to alleviate poverty and raise equality and social justice.

D. Part IV. Conclusion

Using antitrust to pursue alternative goals, particularly to address inequality, is an objective that seeks to expand the reach of antitrust beyond the narrow efficiency-only goal. This alternative purpose of antitrust acknowledges that in seeking to realize only efficiency-based objectives, inequalities are furthered. In seeking to address inequalities under antitrust enforcement and policy, antitrust is framed as public interest law. In unpacking the public interest of antitrust, we unearth goals centered on distributional justice and alleviating inequality. This is reminiscent of a time when antitrust used to be about more than just market efficiency. Exposing these alternatives when looking at antitrust as public interest law, we get to see how at different moments antitrust used to cover the pursuit of such alternatives. This article is desiring to resurrect these alternatives to address inequality.