Consumer Sovereignty (fwd)

[rlande@UBmail.ubalt.edu]

  I had so many requests to see a copy of my suggested antitrust law that I
  am posting a 2 page version of the proposal.  For the longer version,
  together with supporting arguments,  please see the full article in the
  Antitrust Law Journal, vol. 65 (1997).  If you cannot find that journal,
  just let me know and I will mail you a copy.  In the meantime, I will try
  to find and post an 8 page version.
  
  Comments are most welcome.
  
  Bob Lande
  
  
  Consumer Sovereignty: A Unified Theory of Antitrust and Consumer 
  Protection Law
  
  				Neil W. Averitt and Robert H.Lande
  			
  
  	A country could frame its trade regulation laws in terms of 
  preserving the options that competition would bring and preserving 
  meaningful consumer choice among these options.  A country writing its 
  trade laws on a clean slate might wish to express them specifically in 
  these terms.  A statute embodying this option-oriented approach could be 
  worded as follows:
  
  	It is the national policy to foster an economy in which consumers 
  can make free choices among goods and services in a competitive 
  marketplace.  Conduct that unreasonably impairs this goal is hereby 
  declared illegal.  It is specifically illegal to engage in: (1) A, B, C, 
  and any other conduct that unreasonably limits the range of competitive 
  options that would otherwise have been present in the market; and (2) X, 
  Y, Z, and any other conduct that unreasonably impairs consumers' ability 
  to choose among these options.
  
  A legislature enacting this statute would complete it by filling in the 
  blanks for ABC, and XYZ, with those specific items that the country was 
  confident, in light of its own national experience, that it wished to 
  ban.  If the United States were using this approach, for example, it 
  would include specific bans on such things as monopolization, mergers 
  that may substantially lessen competition, and deception.
  
  	A statute along these lines would have several attractive 
  features.  The specific prohibitions will give the business community as 
  much notice as the nature of the subject matter permits.  At the same 
  time, the general residual clauses that are written in terms of options 
  and choice among options will preserve the flexibility necessary to deal 
  with changing conditions.  In this respect our model statute is similar 
  to a combination of the Sherman Act and the FTC Act in American law.  The 
  proposed model seems to be an improvement over the present combination in 
  two important respects, however.  First, by putting the specific and the 
  general clauses in a single statute it encourages the enforcers and the 
  judiciary to employ general principles to guide the development and 
  application of the specific prohibitions.  The statute itself, in other 
  words, will set out internal, general principles of construction that 
  will provide a context within which it is most likely that the specific 
  provisions will be interpreted in the proper manner.  Second, even the 
  general clauses are framed in a relatively objective way.  Conduct is 
  banned, not on grounds of "unfairness" (the approach used in the FTC 
  Act), which can cause considerable judicial uncertainty, but because of 
  its unreasonable effects on the exercise of consumer choice.  The 
  underlying concept of consumer choice will tend to focus the inquiry.  
  Even though the concept of "unreasonable" effects does still leave room 
  for interpretation, this uncertainty will tend to be limited to questions 
  of degree -- identifying the threshold level of net effect that becomes 
  actionable -- rather than leaving the door open to broader uncertainty 
  about what kinds of harm are improper.
  
  	Perhaps the greatest advantage of an option-oriented statute is 
  that it will help governments explain to their citizens -- particularly 
  those businesses and individuals who are relatively inexperienced at 
  dealing with a market economy -- why a system of competitive capitalism 
  is in their best interests.