New Brandeis movement explained

The New Brandeis or neo-Brandeis movement is an antitrust academic and political movement in the United States which argues that excessively centralized private power is dangerous for economical, political and social reasons.[1] [2] Initially called hipster antitrust by its detractors, as also referred to as the "Columbia school" or "Neo-Progressive antitrust," the movement advocates that United States antitrust law return to a broader concern with private power and its negative effects on market competition, income inequality, consumer rights, unemployment, and wage growth.

The movement draws inspiration from the anti-monopolist work of Louis Brandeis, an early 20th century United States Supreme Court Justice who called high economic concentration “the Curse of Bigness” and believed monopolies were inherently harmful to the welfare of workers and business innovation.

The New Brandeis movement opposes the school of thought in modern antitrust law that antitrust should center on customer welfare (as generally advocated by the Chicago school of economics). Instead, the New Brandeis movement advocates a broader antimonopoly approach that is concerned with private power, the structure of the economy and market conditions necessary to promote competition.[3] [4]

Description

The New Brandeis movement believes that centralized private power poses a danger to the economic and social conditions of democracy. Neo-Brandeisians believe, for example, that monopoly power is ripe with potential for abuse. They have also argued that dominant tech platforms create high barriers for potential competitors and reduce bargaining power of individual merchants, content providers, and app developers. The movement advocates for market structures that prevent anti-competitive practices and would increase scrutiny of mergers, including vertical mergers. Proponents believe antitrust laws should focus less on short-term price effects of mergers and more on improving the market conditions necessary to promote real competition.[5]

Support and opposition

Individuals who have been described as being associated with the movement include Lina Khan, Tim Wu, Jonathan Kanter, and Barry Lynn.[6] [7] Senators Cory Booker, Amy Klobuchar and Elizabeth Warren have been described as allies of the movement,[8] [9] and have called on the United States Department of Justice Antitrust Division and Federal Trade Commission to focus their enforcement efforts more on helping workers.[10] The movement has since been the subject of both academic conferences,[11] research papers,[12] and academic journals.[13]

Critics of the New Brandeis movement believe that promoting competition for its own sake causes inefficient producers to stay in business, preferring a litigation approach based on empirical evidence. The term "hipster antitrust" originally began as a Twitter hashtag, and rose to prominence when Senator Orrin Hatch used the term during multiple speeches on the United States Senate floor.[14] [15] [16] [17] Matt Levine of Bloomberg News has written that the term hipster antitrust "appeals to nostalgia for old-fashioned antitrust enforcement".[18] Some proponents of the movement believe the term is pejorative.[19] The term was coined by Konstantin Medvedovsky,[20] an attorney at Dechert, and popularized by former Federal Trade Commissioner Joshua D. Wright.[21] [22]

History

Background

As documented by historian Ellis Hawley, the first "NeoBrandeisian" movement arose in the late 1930s.[23] In reaction to the failures of the first New Deal a group headed by Harvard Professor Felix Frankfurter advanced ideas of economic decentralization and renewed antitrust enforcement. These ideas came to be influential during the late 1930s and onward, during the so-called "Second" New Deal. Prominent individuals associated with the movement included Robert H. Jackson, Benjamin V. Cohen, William O. Douglas, and Thurman Arnold.

From World War II until the 1970s, the Brandeisian view that high market concentration leads to anticompetitive behavior was sometimes called the Harvard School of thought because the view was primarily associated with Harvard University, including works by economists Edward Mason, Edward Chamberlain, and Joe Bain. In the early late 1970s, this view fell out of favor as the views of the Chicago School of thought rose, advocating a close attention to the short term effects of mergers on consumer prices.

Development

Lawrence Lessig wrote "The New Chicago School" article in 1998, challenging directly with analysis of network effects the orthodoxy of antitrust economics during the protected US v Microsoft litigation of the late 1990s. Tim Wu continued his mentor's work with extensive analysis of net neutrality from 2003, to which Yochai Benkler and Nicholas Economides, both then at NYU, contributed. Continuing in the late 2010s,[24] the movement takes inspiration from former US Supreme Court justice Louis Brandeis, who was a prominent anti-monopolist.[25] [26] Brandeis believed that antitrust action should prevent any one company from maintaining too much power over the economy because monopolies were harmful to innovation, business vitality, and the welfare of workers.[27] [28] He described "The Curse of Bigness," believing that large profitable firms use their money to influence politics and create further consolidation and dominance, once stating, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”[29]

In the 2010s, the New Brandeis theory was popularized by legal scholars Lina Khan and Tim Wu, both of Columbia University. Khan published an article about the negative effects of monopoly power by the company Amazon. The theory would heighten scrutiny of large company mergers.[30]

Wu published The Curse of Bigness: Antitrust in the New Golden Age in 2018, which criticized antitrust's drift from its historic origins, introduced Brandeis' life and ideals, and advocated a return a more decentralized economy. [31] In 2019 Khan, Wu and others released a "Utah Statement" written at anti-monopoly conference meant as a codification of the movements' main principles.[32] [33] Another key neo-Brandeisian work is Goliath: The 100-Year War Between Monopoly Power and Democracy, by activist Matt Stoller, also published in 2019.[34]

Biden administration

The movement was perceived to grow in influence during the Biden administration, as compared to the prior Trump and Obama presidencies.[35] [36] In 2020, the American Economic Liberties Project (AELP) was founded by several neo-Brandeisians to support regulatory efforts and research, led by Sarah Miller.[37] The Wall Street Journal described the movement as "a new generation of trustbusters" in 2021, arguing that it represented a shift away from a singular focus on perceived consumer welfare that began with the Reagan administration and the ideas of Robert Bork.[38]

In 2021, the White House appointed Tim Wu, a prominent member of the movement at Columbia, to serve as special assistant to the President for Competition and Technology policy.[39] The President in July 2021 signed a new Executive Order of Competition, which called for a reinvigoration of competition policy across government.[40] Biden later nominated Jonathan Kanter, a neo-Brandeisian, to serve as assistant attorney general in the Department of Justice Antitrust Division.[41] [42] Kanter was confirmed by the United States Senate by a vote of 68–29 and took office in November 2021.[43] [44] Biden also nominated Lina Khan to be Chair of the Federal Trade Commission.[45] [46] On June 15, 2021, her nomination was confirmed by the Senate by a vote of 69 to 28.[47] Khan was confirmed with bipartisan support.[48]

Since the appointment of Neo-Brandeisian "troika" of Tim Wu, Lina Khan, and Jonathan Kanter,[49] the U.S. government has reformed the review of mergers,[50] reinvigorated pro-competitive rulemakings in non-antitrust agencies,[51] blocked several high profile mergers like JetBlue/Spirit[52] and Penguin/S&S[53] [54] and taken tech platform Google to trial in the first major monopolization case of the 21st century.[55] The movement has also experienced some setbacks, including at least one loss against Facebook in court.[56]

Notes and References

  1. Book: Wu . Timothy . The Curse of Bigness: Antitrust in the New Gilded Age . 2018 . Columbia Global Reports . New York . 2022-07-19 . 2022-06-18 . https://web.archive.org/web/20220618181942/https://globalreports.columbia.edu/books/the-curse-of-bigness/ . live .
  2. Web site: 2021-01-06. The New Brandeis Ideology (mid 2010s – Present): On the Dangers of Monopoly Power. 2021-09-05. Unbuilt Labs. en-US.
  3. Khan. Lina. 2018-03-01. The New Brandeis Movement: America's Antimonopoly Debate. Journal of European Competition Law & Practice. 9. 3. 131–132. 10.1093/jeclap/lpy020. 2041-7764. free.
  4. Web site: 2018-10-18. What Is 'Hipster Antitrust?'. 2022-01-02. Mercatus Center. en. 2022-07-26. https://web.archive.org/web/20220726145649/https://www.mercatus.org/bridge/commentary/what-hipster-antitrust. live.
  5. Web site: Khan . Lina M. . Amazon's Antitrust Paradox . 2021-09-06 . www.yalelawjournal.org . 2020-12-30 . https://web.archive.org/web/20201230023856/https://www.yalelawjournal.org/note/amazons-antitrust-paradox . live .
  6. Web site: Nylen . Leah . Biden launches assault on monopolies . live . https://web.archive.org/web/20210708233041/https://www.politico.com/news/2021/07/08/biden-assault-monopolies-498876 . 2021-07-08 . 2021-07-09 . POLITICO . en.
  7. Web site: The New Brandeis Movement: America's Anti-Monopoly Debate . live . https://web.archive.org/web/20210709190325/https://www.openmarketsinstitute.org/publications/the-new-brandeis-movement-americas-anti-monopoly-debate . 2021-07-09 . 2021-07-09 . Open Markets Institute . en-US.
  8. Web site: US: 'Hipster Antitrust' ally joins The Senate Judiciary Committee Competition Policy International . live . https://web.archive.org/web/20210709205524/https://www.competitionpolicyinternational.com/us-hipster-antitrust-ally-joins-the-senate-judiciary-committee/ . 2021-07-09 . 2018-02-20 . www.competitionpolicyinternational.com . 6 February 2018 . en-US.
  9. Web site: Kolhatkar . Sheelah . 2021-11-25 . Lina Khan’s Battle to Rein in Big Tech . 2023-02-19 . The New Yorker . en-US.
  10. News: Booker calls on antitrust regulators to start paying attention to workers . Vox . live . 2018-02-20 . https://web.archive.org/web/20180318175632/https://www.vox.com/policy-and-politics/2017/11/1/16571992/booker-antitrust-letter . 2018-03-18.
  11. Web site: George Mason Law Review's 21st Annual Antitrust Symposium – Law & Economics Center . live . https://web.archive.org/web/20171203205748/http://masonlec.org/events/george-mason-law-reviews-21st-annual-antitrust-symposium/ . 2017-12-03 . 2018-02-20 . masonlec.org . en-US.
  12. Daly . Angela . 2017-08-02 . Beyond 'Hipster Antitrust': A Critical Perspective on the European Commission's Google Decision . 3012437.
  13. Web site: Antitrust Chronicle – Hipster Antitrust Competition Policy International . live . https://web.archive.org/web/20210217203842/https://www.competitionpolicyinternational.com/antitrust-chronicle-hipster-antitrust/ . 2021-02-17 . 2018-09-10 . www.competitionpolicyinternational.com . 18 April 2018 . en-US.
  14. Web site: Hatch Speaks on Growing Controversy Over Antitrust Law in the Tech Sector - Press Releases - United States Senator Orrin Hatch . live . https://web.archive.org/web/20180208013341/https://www.hatch.senate.gov/public/index.cfm/2017/8/hatch-speaks-on-growing-controversy-over-antitrust-law-in-the-tech-sector . 2018-02-08 . 2018-02-20 . www.hatch.senate.gov . en.
  15. Senator Leans Into Avocado Toast Trend to Make a Point . live . Time . en . https://web.archive.org/web/20180306061754/http://time.com/4957421/avocado-toast-orrin-hatch/ . 2018-03-06 . 2018-02-20.
  16. Web site: Dayen . David . David Dayen. 2017-08-07 . Orrin Hatch, the Original Antitrust Hipster, Turns on His Own Kind . live . https://web.archive.org/web/20180222045253/https://theintercept.com/2017/08/07/orrin-hatch-the-original-antitrust-hipster-turns-on-his-own-kind/ . 2018-02-22 . 2018-02-20 . The Intercept . en-US.
  17. Web site: 2018-02-20 . Hatch Speaks Again on 'Hipster Antitrust,' Delrahim Confirmation . live . https://web.archive.org/web/20171213031441/https://www.hatch.senate.gov/public/index.cfm/2017/9/hatch-speaks-again-on-hipster-antitrust-delrahim-confirmation . 2017-12-13 . 2017-09-25 . Orrin Hatch Official site.
  18. Web site: Levine . Matt . 2018-09-10 . Keep Your Bitcoins in the Bank . live . https://web.archive.org/web/20180910160051/https://www.bloomberg.com/view/articles/2018-09-10/keep-your-bitcoins-in-the-bank . 2018-09-10 . 2018-09-10 . www.bloomberg.com.
  19. News: Amazon's Antitrust Antagonist Has a Breakthrough Idea . en . live . 2018-09-10 . https://web.archive.org/web/20180909101418/https://www.nytimes.com/2018/09/07/technology/monopoly-antitrust-lina-khan-amazon.html . 2018-09-09.
  20. Web site: Medvedovsky . Kostya . 2017-06-19 . Antitrust hipsterism. Everything old is cool again . live . https://web.archive.org/web/20180908170919/https://twitter.com/kmedved/status/876869328934711296 . 2018-09-08 . 2018-02-20 . @kmedved . en.
  21. News: Do Not Mistake Orrin Hatch for #HipsterAntitrust . en-US . WIRED . live . 2018-02-20 . https://web.archive.org/web/20180127045207/https://www.wired.com/story/orrin-hatch-antitrust-hipster-antitrust/ . 2018-01-27.
  22. News: 2017-08-04 . Hipster antitrust hits the Senate: The Tipline for 4 August 2017 . en . globalcompetitionreview.com . live . 2018-02-20 . https://web.archive.org/web/20210723023112/https://globalcompetitionreview.com/hipster-antitrust-hits-the-senate-the-tipline-4-august-2017 . 2021-07-23.
  23. Book: Hawley . Ellis . The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence. . 1966 . Princeton University Press . Princeton, NJ.
  24. Khan. Lina. 2018-03-01. The New Brandeis Movement: America's Antimonopoly Debate. Journal of European Competition Law & Practice. 9. 3. 131–132. 10.1093/jeclap/lpy020. 2041-7764. free.
  25. News: Dayen. David. David Dayen. 2017-04-04. This Budding Movement Wants to Smash Monopolies. en-US. The Nation. 2021-07-09. 0027-8378. 2021-07-23. https://web.archive.org/web/20210723023109/https://www.thenation.com/article/archive/this-budding-movement-wants-to-smash-monopolies/. live.
  26. Web site: De La Cruz. Peter. The Antitrust Pendulum Swings to the Populist Pole. live. 2021-07-09. The National Law Review. en. 2021-07-09. https://web.archive.org/web/20210709192325/https://www.natlawreview.com/article/antitrust-pendulum-swings-to-populist-pole.
  27. News: 2020-08-06. What more should antitrust be doing?. The Economist. 2021-09-06. 0013-0613. 2021-09-06. https://web.archive.org/web/20210906004111/https://www.economist.com/schools-brief/2020/08/06/what-more-should-antitrust-be-doing. live.
  28. Book: Eeckhout, Jan. The Profit Paradox: How Thriving Firms Threaten the Future of Work. June 2021. Princeton University Press. 978-0-691-21447-4. 246–248. en. 2021-12-12. 2022-07-26. https://web.archive.org/web/20220726145649/https://books.google.com/books?id=HKAMEAAAQBAJ. live.
  29. News: Dayen. David. David Dayen. 2017-04-04. This Budding Movement Wants to Smash Monopolies. The Nation. en-US. 2021-09-07. 0027-8378. 2021-07-23. https://web.archive.org/web/20210723023109/https://www.thenation.com/article/archive/this-budding-movement-wants-to-smash-monopolies/. live.
  30. Web site: Webb. Patterson Belknap. Walter-Warner. Tyler LLP-Jake. Hatch. Jonathan H.. 2018-11-08. A Brief Overview of the "New Brandeis" School of Antitrust Law. 2021-09-05. Lexology. en. 2022-07-26. https://web.archive.org/web/20220726145650/https://www.lexology.com/library/detail.aspx?g=82aaa169-f986-4c50-af2e-a8837f4b1fc4. live.
  31. Book: Wu . Timothy . The Curse of Bigness: Antitrust in the New Gilded Age . 2018 . Columbia Global Reports . New York . 2022-07-19 . 2022-06-18 . https://web.archive.org/web/20220618181942/https://globalreports.columbia.edu/books/the-curse-of-bigness/ . live .
  32. Web site: Din . Benjamin . 21 June 2021 . The dawn of the age of Khan . 2022-08-06 . Politico . en.
  33. Web site: The Utah Statement . 19 November 2019 .
  34. Web site: Scola . Nancy . 21 April 2023 . Washington’s Angriest Progressive Is Winning Over Conservatives – and Baffling Old Allies . 2023-04-21 . Politico . en.
  35. Web site: Sammon. Alexander. Dayen. David. David Dayen. 2021-07-21. The New Brandeis Movement Has Its Moment. 2021-07-23. The American Prospect. en-us. 2021-07-23. https://web.archive.org/web/20210723023110/https://prospect.org/justice/new-brandeis-movement-has-its-moment-justice-department-antitrust-jonathan-kanter/. live.
  36. Web site: Nylen . Leah . 27 December 2021 . The new rules of Monopoly . 2023-04-21 . Politico . en.
  37. News: McCabe . David . 2020-02-11 . She Wants to Break Up Big Everything . en-US . The New York Times . 2023-04-21 . 0362-4331.
  38. News: Ip. Greg. 2021-07-07. Antitrust's New Mission: Preserving Democracy, Not Efficiency. en-US. Wall Street Journal. 2021-07-23. 0099-9660. 2021-07-22. https://web.archive.org/web/20210722122146/https://www.wsj.com/articles/antitrusts-new-mission-preserving-democracy-not-efficiency-11625670424. live.
  39. Web site: Feiner . Lauren . 5 March 2021 . Big Tech critic Tim Wu joins Biden administration to work on competition policy . 2022-08-06 . CNBC . en.
  40. Web site: Executive Order on Promoting Competition in the American Economy . 9 July 2021 .
  41. Web site: Biden taps progressives' favorite for DOJ antitrust post . 2021-07-20 . POLITICO . en . 2021-07-20 . https://web.archive.org/web/20210720180448/https://www.politico.com/news/2021/07/20/biden-picks-doj-antitrust-chief-500310 . live .
  42. Web site: Feiner . Lauren . 2021-09-24 . Nine former DOJ antitrust chiefs urge Senate to confirm Jonathan Kanter as antitrust head . 2021-10-05 . CNBC . en . 2021-10-05 . https://web.archive.org/web/20211005014232/https://www.cnbc.com/2021/09/24/former-doj-antitrust-chiefs-urge-senate-to-confirm-jonathan-kanter.html . live .
  43. Web site: On the Nomination (Confirmation: Jonathan Kanter, of Maryland, to be an Assistant Attorney General) . 2 April 2022 . US Senate . 2 April 2022 . https://web.archive.org/web/20220402183708/https://www.senate.gov/legislative/LIS/roll_call_votes/vote1171/vote_117_1_00470.htm . live .
  44. Web site: 2021-11-17 . U.S. Senate confirms Google critic Kanter to head Justice Dept Antitrust Division . 2021-11-17 . Reuters . en-US . 2021-11-17 . https://web.archive.org/web/20211117001630/https://www.reuters.com/world/us/us-senate-confirms-google-critic-kanter-head-justice-dept-antitrust-division-2021-11-16/ . live .
  45. Web site: Kelly . Makena . 22 March 2021 . Biden to nominate tech antitrust pioneer Lina Khan for FTC commissioner . 22 March 2021 . . . en . 22 March 2021 . https://web.archive.org/web/20210322195017/https://www.theverge.com/2021/3/22/22321092/lina-khan-ftc-tech-antitrust-law-regulation-amazon . live .
  46. Web site: 22 March 2021 . President Biden Announces his Intent to Nominate Lina Khan for Commissioner of the Federal Trade Commission . 22 March 2021 . The White House . 28 June 2021 . https://web.archive.org/web/20210628011638/https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/22/president-biden-announces-his-intent-to-nominate-lina-khan-for-commissioner-of-the-federal-trade-commission/ . live .
  47. Web site: Brandom . Russell . 2021-06-15 . Tech antitrust pioneer Lina Khan confirmed as FTC commissioner . 2021-06-15 . . . en . 2021-06-15 . https://web.archive.org/web/20210615162953/https://www.theverge.com/2021/6/15/22527709/lina-khan-ftc-commissioner-competition-facebook-amazon-google-apple . live .
  48. News: Brandom . Russell . 30 June 2021 . Amazon says new FTC chair shouldn't regulate it because she's too mean . . . 1 July 2021 . 30 June 2021 . https://web.archive.org/web/20210630200856/https://www.theverge.com/2021/6/30/22557456/amazon-lina-khan-recusal-petition-federal-trade-commission-antitrust . live .
  49. Web site: Wu, Khan and Kanter: Biden's antitrust troika falls into place . 2024-01-19 . Nikkei Asia . en-GB.
  50. Web site: 2023-12-12 . Antitrust Division 2023 Merger Guidelines United States Department of Justice . 2024-01-19 . www.justice.gov . en.
  51. Web site: Commissioner . Office of the . 2022-08-16 . FDA Finalizes Historic Rule Enabling Access to Over-the-Counter Hearing Aids for Millions of Americans . 2024-01-19 . FDA . en.
  52. Web site: Josephs . Leslie . 2024-01-16 . Judge blocks JetBlue-Spirit merger after DOJ's antitrust challenge . 2024-01-19 . CNBC . en.
  53. Web site: 2022-11-01 . Judge blocks Penguin Random House-Simon & Schuster merger . 2024-01-19 . CNBC . en.
  54. Web site: 2024-06-22. United States v. BERTELSMANN SE & CO. KGAA, 1:21-cv-02886.
  55. News: McCabe . David . Kang . Cecilia . 2023-09-06 . In Its First Monopoly Trial of Modern Internet Era, U.S. Sets Sights on Google . 2024-01-19 . The New York Times . en-US . 0362-4331.
  56. Web site: Feiner . Lauren . 2023-02-01 . Meta acquisition of Within reportedly approved by court in loss for FTC . 2024-01-19 . CNBC . en.

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