Antitrust Law Should Continue to Prioritize Consumers Over Corporations | Opinion

For decades, American antitrust law has prioritized people over corporations. If consumers are getting more innovative products at cheaper prices, then the government shouldn't intervene to protect competitor companies that are struggling to keep up.

But now, policymakers in Washington want to change that core principle of American law. According to a new study written by leading antitrust expert Koren W. Wong-Ervin, proposals in Congress "would protect inefficient companies from market forces—a development that could lead to higher prices for consumers." There are numerous problems with this approach, with high risks of unintended consequences.

First, these bills would permit less efficient competitors to bring lawsuits against America's most innovative companies, even if there's scant evidence that consumers are being harmed. If these laws are passed, rival corporations and the government will have more power to dictate the tech products that end up in the hands of American consumers. Not only will these bills make it harder for American tech companies to keep up the pace of innovation, but they'll also put serious roadblocks in the way of our country gaining leadership on the strategic technologies of the future. Instead, foreign companies, particularly companies in China, could easily gain the upper hand. The impact on our national security could be devastating.

Next, the proposed bills would shift American antitrust law away from its foundational principles and toward a more European-style approach that is out of step with legal precedent and modern economics. The report finds that adopting the "European approach risks damaging America's robust innovation ecosystem." It cites a 2020 McKinsey & Company study indicating that antitrust and labor law in Europe is "complex and can be a deterrent for entrepreneurs." The report ultimately concludes that "at a minimum, the proposals would reverse decades of U.S. Supreme Court precedent and introduce significant uncertainty through new and untested standards, likely chilling robust competition."

Third, the proposals cut to the core of American innovation. For decades, America has led the world in innovation because of its entrepreneurial spirit, an educational system that trains a talented and creative workforce, and a legal system that allows innovators to innovate. But if these proposals become law, they would determine the apps and services you can have on your phone and the results you see when you search. They'd remove lower-priced products from e-commerce websites and interfere with basic online tools like maps.

The U.S. Capitol building is seen
The U.S. Capitol building is seen at sunrise. Sarah Silbiger/Getty Images

Lastly, the legislation before Congress would also make it more difficult for companies to get acquired—a restriction that would hurt thousands of startup businesses throughout America. The very possibility that a company might get acquired helps many startups secure the investment necessary to get off the ground. As more and more startups have secured the funding they need to start and grow, innovation hubs have sprung up all across America and not just on the coasts. Without the possibility of an acquisition, that job-creating startup growth will slow.

The startup ecosystems spread across America are the envy of the world, and it isn't an accident. A legal system focused on innovation and competition helps to make it possible and the data proves this. From 2017 to 2019, there were roughly twice as many venture capitalists in the United States as there were in Europe, and during that same time, U.S. startups attracted 367 percent more venture funding than those in the European Union. The U.S. startup rate also is more than twice that of the best-performing European country.

When inflation is hitting the wallets of people throughout America and the economy is slumping, Congress should stop pursuing policies that could weaken the U.S. innovation economy. It should focus instead on reducing the cost of living and on building an American economy that is stronger, more resilient, and more innovative than ever.

Kent Conrad represented North Dakota in the Senate from 1992-2013.

Saxby Chambliss represented Georgia in the Senate from 2003-2015.

Senators Conrad and Chambliss serve as advisers to the American Edge Project, which released the antitrust study by Wong-Ervin.

The views expressed in this article are the writers' own.