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Washington, D.C.— Today, Senator Orrin Hatch (R-Utah), the senior member and former Chairman of the Senate Judiciary Committee, spoke again on the Senate floor on a number of critical antitrust issues. This speech serves as a follow-up to a speech he delivered last month on “hipster antitrust.”

 

[Video via YouTube]

In America’s free enterprise tradition, no less than in its larger political tradition, we deeply distrust concentrated power. We distrust the intervention of the state, to be sure. Our system is largely defined by limited government. But so, too, do we cast a wary eye upon powerful private entities. We have little tolerance for the monopolist which secures its market position anti-competitively, and we offer no quarter to the naked cartel. In other words, we no sooner trust concentrated private power than concentrated public power to dictate the direction of our economy.

And that, right there, Mr. President—that is why we turn to antitrust. That’s the middle ground—between intrusive public management and corrosive private conduct—that antitrust is charged with seizing and protecting. For we know our markets will never fulfill their promise unless they remain free and competitive, and we know they won’t long remain free or competitive without a sound competition policy holding that center ground. 

Senator Hatch also noted how he is happy to finally see movement on the nomination of Makan Delrahim, calling him “an exceptional antitrust attorney,” and “just the person we’re going to need as we sort this all out.” Senator Hatch recognized Delrahim’s nomination as an opportunity for a wider discussion on antitrust.

 

[Video via YouTube]

This debate is not going to be confined to the floor of the Senate. At the agencies, in the courtroom, from the lecture hall to the opinion pages, there are going to be a lot of voices weighing in. Most, we can hope, will be helpful. All, we can resolve, will be heard. And so I want to applaud those on the left jumping into this debate, and I wish the best of luck to the new Open Markets Institute. I had a little fun with the hipsters last time around, and they took it in good stride. I’m now told some prefer the title New Brandeis School. I think that’s fitting. Justice Brandeis was a bit of hipster in his time. I should know; I was basically a contemporary of his.

As a longtime champion for antitrust laws, Senator Hatch also spoke on the importance of adapting trust regulations while also taking lessons from the past.

[Video via YouTube]

We keep our markets fresh by keeping our doctrine current. But I would, as an old Republican must, urge caution, especially to some of the more zealous advocates for reform, hipster or otherwise. I’ll gladly sample the avocado toast. I really will. But nobody should get the idea we’ve moved on from the meat and potatoes. For it’s easy, with the benefit of hindsight, to critique past precedent formed in the familiar image of the mass industrial process. It’s far harder to refashion doctrine for a new age that’s still evolving in surprising ways.

The full speech, as prepared for delivery, is below:

Mr. President, I rise today to return to the topic of antitrust. When I last spoke on the matter, the debate was already simmering, albeit mostly on the left. In the time since, controversy in both our markets, and our politics, has kept it at the fore. Handled prudently, that can be a good thing. I say we have this discussion. I think it’s important; heck, I’ll even try to do my part to make it a little more fun.

But I do have my concerns that the topic of antitrust policy is still more enthusiastically invoked than deliberately considered. I am concerned that it is still undermined by the same old easy retreats to the right, and to the left. That may be typical of issues here in Washington. But on no issue can we afford it less. Because, you see, especially in antitrust policy, it’s critical that the center holds. It’s critical we secure that delicate middle ground — hard won over the years and easily lost in a moment of fervor — whereon economic liberty thrives. So, I’ve come to the floor, once again, to speak, and to the growing discussion, to contribute. Permit me, Mr. President, to say a few words about holding the center.

When I took to this floor last month, I argued that on the fundamental question of economic management, America has courageously defied the historical norm. Rather than acquiescing to central planning, we fully embraced free enterprise. Thus, ours is a market economy, and the most prosperous one of our times. But markets are messy. They’re chaotic, and from the individual perspective, impossibly complex. Perhaps most counter-intuitively, they are — in a sense — disorganized. For all their productivity, for all the wonders they work, there is no single actor or entity in control. The miracle arises all on its own, through an order spontaneously coordinated by price and balanced by the efforts of millions.

Little surprise, then, that in America’s free enterprise tradition, no less than in its larger political tradition, we deeply distrust concentrated power. We distrust the intervention of the state, to be sure. Our system is largely defined by limited government. But so too do we cast a wary eye upon powerful private entities. We have little tolerance for the monopolist which secures its market position anti-competitively, and we offer no quarter to the naked cartel. In other words, we no sooner trust concentrated private power than concentrated public power to dictate the direction of our economy.

And that, right there, Mr. President — that is why we turn to antitrust. That’s the middle ground—between intrusive public management and corrosive private conduct — that antitrust is charged with seizing and protecting. For we know our markets will never fulfill their promise unless they remain free and competitive, and we know they won’t long remain free, or competitive, without a sound competition policy holding that center ground. 

Now, as I mentioned earlier, events of late seem determined to keep antitrust at the forefront of the public debate. We are witnessing innovation and disruption at a dizzying pace. Markets are concentrating, powerful players are staking out valuable ground, and accusations of anticompetitive behavior — some bona fide and many not — are mounting. Across the board, an anxiety seems to be settling in.

Therefore I want to be very clear, especially to my friends on the left: I see it. I understand it. That the challenges here are real, there can be no doubt. That an update in the doctrine may well be necessary, there should be no dispute. Where perhaps I differ, Mr. President, is that I don’t quite see the need for the panic. I think American antitrust is up to this challenge.

The story of capitalism has always been a story of change, and if we’re doing things right, that change doesn’t come according to anyone’s plan or script. Just when society grows comfortable in certain habits of law and commerce — just as each part of the economy learns to play its part — the ground again shifts beneath our feet. It can be a bit disorienting.

But not to worry, Mr. President. That’s where our old, trusted friend, the consumer welfare standard, comes back in. As I emphasized in my last address, and as I’ll continue to emphasize here, it’s a proven way of directing us aright. As new innovation fundamentally alters the landscape, as entrepreneurs press beyond current frontiers and into the unknown, the consumer welfare standard is like a compass, with a bearing set toward that critical middle ground which antitrust is charged with protecting. True north is not what’s best for market competitors, not what’s most convenient for market regulators, but what most furthers market competition itself, the better to ward off the dangers of collectivism, the surer to escape the stagnation of monopoly. 

Now, I know — I understand — that this hardly settles things. Identifying the principle by which we orient ourselves is the start of the discussion, not the conclusion. The consumer welfare standard is, like I’ve said, a compass; it’s not a map. It guides our journey, without fixing a precise course through the changing terrain. Adjustments are to be expected. After all, much of antitrust doctrine, as it is received today, was built upon the familiar economic process of resource extraction, manufacture, distribution, and retail. That the digital age would present commercial arrangements to defy those traditional classifications is not, altogether, surprising.

Fortunately, antitrust is a common law exercise, and leaves plenty of room for improvement.  Our conventional categories of anticompetitive conduct can be tweaked, refashioned, or even expanded, in light of technological advancement and market evolution. That process will become all the easier as our tools for taking the measure of the land improve. Current analysis does well in taking account of price; it may do better still in taking account of quality. Reams of data never before thought obtainable, and new econo-metric methods only recently deemed practical, entice us with a chance to plot curves which — until recently — were confined to the theoretical. Our basic and time-honored foundational models are increasingly nudged and bounded by contributions from the behavioral sciences, and game theory is continuously opening new horizons in market analysis.

I am happy to have that discussion, Mr. President. Again, we keep our markets fresh by keeping our doctrine current. But I would, as an old Republican must, urge caution, especially to some of the more zealous advocates for reform, hipster or otherwise. I’ll gladly sample the avocado toast. I really will. But nobody should get the idea we’ve moved on from the meat and potatoes. For it’s easy, with the benefit of hindsight, to critique past precedent formed in the familiar image of the mass industrial process. It’s far harder to refashion doctrine for a new age that’s still evolving in surprising ways.

As we trek into the unknown, let’s take note of where we’ve been, and appreciate the hazards of the route. Let’s recall that whatever the changes at the surface of the market, basic economic principles persist through the ages. Network effects in our digital infrastructure may feel very new today, but as I emphasized in my last address, the concept is actually very old. It structured the telephone market long before we could even conceive of an online search market.

Let’s recall also that the foresight of regulators, and thus the wisdom of their regulation, is inevitably limited. We talk a lot about platform economics today, and worry about the bottlenecks of digital traffic, as if the future has finally and permanently arrived. But with the rate of innovation these days, there’s no telling whether the essential facilities of today will prove all that essential tomorrow. We can do little more than guess at what form exclusive dealing or foreclosure may take in markets yet unseen.

Let’s recall that markets often correct themselves. As more than a few formerly-invincible corporate titans can attest, free enterprise offers few opportunities for eternal life. And when regulators do step in, doctrine still tends to lag behind the market. Thus the powers we grant government now will likely survive into a future that’s not yet defined. 

Finally, before we rush to grant enforcement officials a broad mandate with an ill-defined objective to do something, let’s recall that regulation can hurt as much as it can help. As we’ve seen in some attempts at rate regulation, a regime meant to restrain the biggest players may well, with the passage of time, become the preferred tool for excluding new entrants. Merger analysis sometimes does more for rivals than for consumers. And as we’ve learned in nearly every form of intervention, a medicine which creates too much unpredictability, and upsets too many investment-backed expectations, may well prove worse than the disease.

In the end, like I said, I think we’re up to this challenge. With compass in hand, an open mind, and appreciation for what our journey thus far has taught, antitrust will continue the work of securing that middle ground whereon markets thrive. And when all is said and done — after all the controversy and high emotion have subsided — we may just find that all we needed was a small course adjustment. Perhaps, Mr. President, this needn’t be a reckoning, when just a little reform will do.

We can set about correcting market failures, and readjusting system incentives, without going after some industry, or bringing this or that firm to heel. When I first sounded the alarm on Microsoft, years ago, it wasn’t merely because it was deemed too powerful, or because a new class of high-tech barons risked undermining democratic norms. It was because of well-founded concerns of concrete, competitive harm to developing markets.

The question in antitrust was not then, and we must not allow it to become today, whether any of our companies are too big, or too profitable, or too dominant; the question is whether they engage in identifiable anticompetitive conduct, or a merger is likely to facilitate it. The question is whether it can be shown, as far as the imperfect tools of economics allow and an evolving doctrine can bear, that the conduct at issue, or the merger proposed, does more to fortify the firm than serve the consumer. 

Of course, that kind of analysis may not make headlines, and it may not satisfy our deep-seated yearning to identify heroes and villains. But it’s the best way to handle antitrust. If we are going to get this right, we’re going to need to keep cool heads. Antitrust already asks some of the hardest questions, like why we allow the market to put scarce resources to their highest uses when our social and political valuations don’t match that of prevailing prices. Antitrust already forces some of the hardest choices, like how to trade the losses of some industries, and some actors, for the gains of the economy as a whole. There’s no need to make things harder still, by turning antitrust into a political cudgel, as the left is wont to do, or by dismissing it as yet another example of government overreach, as the right is often guilty.

So, let us — let all of us, on all sides — tone down the political rhetoric. Should this debate do no more than feed our appetite for political gamesmanship, antitrust will not be the better for having it. And you know what? I don’t think I’m alone here. My colleagues here in the Senate seem to be rising to the occasion. My friends on the other side of the aisle have introduced legislation that, however flawed in my view, reflects the seriousness with which they take these issues. And I am happy to see there’s finally movement again on the nomination of Makan Delrahim. He’s an exceptional antitrust attorney, and just the person we’re going to need as we sort this all out. I won’t shy from discussing his qualifications here, and I wouldn’t fault my colleagues for using his nomination as an opportunity for a wider discussion on antitrust. But now it’s time to put him to work. I’m pleased to see we’re almost there.

At the same time, this debate is not going to be confined to the floor of the Senate. At the agencies, in the courtroom, from the lecture hall to the opinion pages, there are going to be a lot of voices weighing in. Most, we can hope, will be helpful. All, we can resolve, will be heard. And so I want to applaud those on the left jumping into this debate, and I wish the best of luck to the new Open Markets Institute. I had a little fun with the hipsters last time around, and they took it in good stride. I’m now told some prefer the title New Brandeis School. I think that’s fitting. Justice Brandeis was a bit of hipster in his time. I should know, I was basically a contemporary of his.

Further, I want to acknowledge the efforts of private litigants and policy advocates pressing their case in courts here and in Europe. They’ve been working tirelessly to make a data-driven case that speaks directly to consumer harm. They play an important role, and the doctrine is better for their efforts, however their cases turn out.

Finally, I want to implore my fellow conservatives: continue joining in on this debate. Keep investing in antitrust. Embrace it as an area of the law in which we speak to the power of the markets by speaking to the importance of sound regulation. Make the case that, like property or contract or commercial law, antitrust is that rare species of government regulation which opens doors rather than slamming them shut. As I have been arguing for decades now, should our doctrine grow stagnant, markets may well concentrate beyond what is politically acceptable. Calls for excessive government intervention will only increase, and the yolk of the regulator could soon be our portion.

And with that, Mr. President, I’ll close, right where I began. As this debate proceeds, it falls to all of us to do our part in getting this right. The challenges presented by our evolving markets are real. But we are not the first to break new ground, nor will we be the last to worry that the new ground broken sits far removed from competition’s precious center. One way or another, we’ve made it before. I trust we can make it again. I yield the floor.