The Nanny State Goes Shopping

Key Takeaways

• Antitrust traditionally targets price/output distortions, not consumer preferences.
• Neo‑Brandeisian proposals aim to reshape outcomes regulators deem desirable.
• EU Digital Markets Act forces choice screens despite no output restriction.
• German and South African cases enforce rules based on “wrong” consumer choices.
• Shifting focus risks protecting regulators over consumers and stifles innovation.

Pulse Analysis

The consumer‑welfare standard (CWS) has long anchored antitrust analysis in concrete economic harms: firms that restrict output or raise prices deprive buyers of transactions they would otherwise make. By treating consumer preferences as a neutral datum, the CWS avoids normative judgments about what people should buy, focusing instead on whether market power impairs choice. This framework has guided enforcement for decades, ensuring that interventions are tied to measurable price or output effects rather than abstract policy goals.

In recent years, a wave of Neo‑Brandeisian and populist thinking has sought to broaden antitrust’s remit. The European Union’s Digital Markets Act mandates choice screens, limits self‑preferencing, and forces data‑sharing, not because platforms are shown to inflate prices, but because regulators dislike the concentration of market power. Similar moves appear in Germany, where the Bundeskartellamt challenged Amazon for relegating higher‑priced items, and in South Africa, where Google must promote local firms. These actions target the fact that consumers gravitate toward dominant platforms, treating those preferences as a problem in themselves.

The shift from output‑focused scrutiny to preference‑shaping enforcement carries significant risks. Policymakers may end up protecting ideological visions of market structure, potentially raising costs, reducing convenience, and dampening incentives for scale‑driven innovation. Moreover, without clear economic benchmarks, antitrust becomes vulnerable to political capture, favoring rent‑seekers over genuine consumer welfare. A return to evidence‑based, price‑and‑output metrics would preserve the balance between safeguarding competition and respecting the choices that markets reveal.