Antitrust on Trial: Why the FTC is an Arbitrary Threat to Fair Business

While primarily motivated by a desire to promote consumer welfare, antitrust has become a witch hunt which endangers the ability of businesses in general to effectively operate. Antitrust regulation was created on the idea that businesses can effectively collude to keep prices high, and that the emergence of monopolies will create a stable threat to low prices. Theoretically in “perfect competition,” businesses will be making zero profit and consumers will capture a maximum amount of utility. While even antitrust regulators acknowledge that this is not how the market functions in real life, they do not have a strong positive vision to replace the unrealistic model. Antitrust enforcement has key weaknesses that arbitrarily harm consumers and producers.

Antitrust regulation necessarily adds an element of radical risk to every business decision. While prosecutors may have a clear idea of how antitrust is to be enforced and the relevant precedent, it is difficult for businesses to keep the same legal knowledge ever-present. This requirement unnecessarily burdens small and medium sized businesses that do not have access to legal advisory council. Thankfully most antitrust cases will avoid smaller businesses, but history has shown that the state is not afraid to prosecute even the smallest businesses. Making plans for the future and setting prices become much more difficult when a somewhat arbitrary actor with nearly unchecked power comes into play. Even the method of determining the validity of the Federal Trade Commission’s claims, fair trial, takes up the precious time and money of the business being prosecuted. While this same burden applies to generally corrupt businesses (not being prosecuted for antitrust reasons specifically) they bear both a moral weight and the weight of knowledge in those circumstances, as it is much easier to avoid explicitly illegal business practices. Because monopoly and unfair pricing have been defined in so many different ways, even well-meaning businesses can stumble into a FTC suit.…