In an attempt to shift blame for inflation rates away from Democrats and government spending, Sen. Elizabeth Warren is calling for the aggressive use of antitrust laws. She wants to go after grocery stores and a host of other industries that she blames for rising prices.
But as Congress evaluates competition policy, Warren offers an excellent example of why undermining the consumer welfare standard and politicizing antitrust laws would be disastrous for consumers.
Attempting to assuage concerns about inflation, the Biden administration has shifted its position on inflation from being a “high-class” problem to being a “transitory” problem to claiming that its tax-and-spend plan would actually solve inflation. Notably, the cost of living hit a 40-year high with 7% inflation last year. However, the latest tactic from President Joe Biden and Warren, blaming the private sector and calling for more government intervention, should give lawmakers pause.
For more than four decades, the consumer welfare standard has guided competition policy. This standard places important guardrails on antitrust enforcement, limiting the government’s ability to pursue ideologically driven results by tying enforcement to economic analysis and harm to consumers. In contrast, Warren argues that big is inherently bad.
The problem is that departing from the consumer welfare standard allows for politicized antitrust enforcement — not just in the tech sector but with every industry. Warren is showing a glimpse of what that could mean as she blames “corporate greed” for the rising costs consumers face. This bears relevance to the debate over Big Tech. While there may be valid concerns about the size and scope of Big Tech, untethering enforcement from robust data-driven analysis would give politicians the ability to exercise greater control over the economy.
In November 2021, the Biden administration asked the Federal Trade Commission to investigate oil and gas companies for their role in rising prices. Warren also blamed oil companies for rising prices, as well as car companies and grocery stores. Rather than evaluate how government policies and regulations can stifle competition and affect inflation, Warren is attempting to sell the public on a paper-thin argument that there is economywide collusion to hike prices. This argument does not align with economic realities.
While some conservatives have revived a version of antitrust for political purposes, that goal is not shared by liberals. The Biden administration called for antitrust enforcement as political cover for its tax-and-spend plan, and Warren is advocating for antitrust laws to be used for wealth redistribution. FTC Commissioner Rebecca Slaughter wants the agency to pursue an “anti-racist” agenda and other social goals.
Warren’s actions should give pause to those willing to grant increased antitrust powers to the government. Government-knows-best policies may appeal to certain populists, but they will undoubtedly harm consumers.
Will Yepez is a policy and government affairs associate with the National Taxpayers Union, a nonprofit organization dedicated to advocating for pro-taxpayer policy at all levels of government.
