Realigning Antitrust Policy

Gail Slater, the new head of the Justice Department’s Antitrust Division, has taken on the moniker “Hillbilly Antitrust” with a bluntness that reflects her approach to the role. While her past pro-regulation stances and skepticism of large companies, particularly in the tech sector, have raised concerns, her recent pronouncements suggest a potential shift away from the ideologically driven antitrust enforcement of the Biden administration. This shift offers a glimmer of hope for a return to a more rational and data-driven approach to antitrust policy.

Slater’s remarks at the Little Tech Competition Summit in April signaled a crucial change: the return of economists to the antitrust decision-making process. Under the previous administration, economic analysis was often sidelined in favor of a broader philosophical opposition to corporate size. Slater’s affirmation that the DOJ will require expert economic testimony in antitrust cases marks a significant departure from this approach. It suggests a renewed emphasis on grounding enforcement actions in empirical evidence rather than ideological assumptions. This move towards fact-based analysis is a welcome change, offering a path towards greater predictability and consistency in antitrust enforcement.

The Biden era’s antitrust approach, championed by Lina Khan at the Federal Trade Commission and Jonathan Kanter at the DOJ, often appeared arbitrary and inconsistent. Their focus on the perceived threat of large companies to democracy, rather than demonstrable harm to consumers, led to a series of enforcement actions that seemed driven more by ideology than data. This approach, derisively compared to the whimsical game of Calvinball, lacked clear rules and predictable outcomes, creating uncertainty and potentially stifling innovation. The emphasis on abstract notions of democratic harm, difficult to quantify or prove in court, often overshadowed the practical impact on consumers and market competition.

The results of this ideologically driven approach were a series of high-profile failures. The DOJ’s challenge to the JetBlue-Spirit Airlines merger, ostensibly to preserve competition, ultimately resulted in Spirit’s bankruptcy, leaving consumers with fewer low-cost travel options. Similarly, the DOJ’s suit against Visa for allegedly monopolizing debit networks ignored the plethora of payment options available to consumers. These cases, among others, highlight the disconnect between the Biden administration’s antitrust rhetoric and the realities of the marketplace. The lack of demonstrable consumer harm and the readily apparent negative consequences of these actions underscore the need for a more grounded and evidence-based approach.

While Slater’s appointment offers a potential course correction, it’s crucial to temper expectations. She is not a free-market purist and has expressed skepticism towards economists who are ideologically opposed to antitrust enforcement. Her framework, which she terms “MAGA Antitrust”, suggests a hybrid approach that may not fully embrace the consumer-welfare standard of previous eras. Her alignment with JD Vance, who has expressed some positive views of Lina Khan, further suggests that a complete return to pre-Biden antitrust norms is unlikely. Nevertheless, even a partial return to data-driven decision-making represents a significant improvement over the preceding administration’s often arbitrary approach.

Ultimately, the success of Slater’s tenure will depend on her ability to balance her skepticism of large companies with a commitment to evidence-based enforcement. If she can prioritize demonstrable consumer harm over abstract philosophical concerns, and if she can restore the role of economic analysis in antitrust decisions, her leadership could mark a positive turning point for antitrust policy. A shift towards a more predictable and data-driven approach will benefit not only businesses, but also consumers and the overall health of the American economy. The hope is that Slater’s “Hillbilly Antitrust” will translate to a pragmatic focus on real-world outcomes rather than ideological crusades.