Jenner & Block

The Consumer Welfare Standard on Shaky Ground?

For the past forty years, the consumer welfare standard (CWS) was the consensus economic model that antitrust enforcement agencies used to determine whether a company’s behavior necessitates antitrust action.  The CWS became mainstream after former DC Circuit Justice Robert Bork published his exceedingly influential The Antitrust Paradox in 1978.  The book argued that antitrust laws were created to maximize consumers’ benefits, which meant focusing on surplus gains for consumers while disregarding efficiency gains for producers.  The US Supreme Court quickly solidified Bork’s views in Reiter v. Sonotone Corp.  The CWS has since provided more predictability in antitrust enforcement, narrowing its focus purely on consumer prices. Read more.