Reassessing the Chicago School of Antitrust Law

Professor Randy Picker presenting his work


The University of Chicago Law Review gathered many of the nation’s distinguished antitrust experts last month to reevaluate the once-revolutionary Chicago School of Antitrust, a framework for analyzing competition law developed in the 1970s and 1980s by some of the University of Chicago Law School’s leading scholars of law and economics.

The symposium, titled “Reassessing the Chicago School of Antitrust Law” featured prominent law professors and economists, leading antitrust attorneys and judges, and current and former Federal Trade Commissioners. Over the course of two days, participants presented new research analyzing the Chicago School’s accomplishments and its shortcomings. They debated whether the School’s strengths outweigh its weaknesses and whether its principles should be cast aside in favor of new legal standards.

“I am not sure I know exactly what the ‘Chicago School’ means but one way to read Robert Bork’s The Antitrust Paradox is that it is nothing more than the idea that antitrust should use economics in pursuit of economic efficiency. Of course, that is pretty generic, and the trick is to figure out how to give content to that,” said Randal Picker, the James Parker Hall Distinguished Service Professor at the Law School. He presented research that focused on the effect of antitrust enforcement on the telecommunications industry over the latter half of the 20th century, when Chicago School principles gained prominence. He stressed the importance of considering dynamic competition in antitrust enforcement, such as the effect of enforcement on innovation over time.  

The Chicago School revolutionized the antitrust field in the 1970s and 1980s. Exactly what the School stands for is hotly disputed but its central feature is indisputably the consumer welfare standard—the principle that antitrust law should serve consumer interests and that it should protect competition rather than individual competitors. Chicago School proponents contrast their approach with that of the government’s antitrust policies in the 1950s and 1960s, which, they argue, was an incoherent mess that confused the vigorous competition that shuttered inefficient businesses with broader harms to the competitive process. The Chicago School is also generally associated with a conservative approach to antitrust enforcement that espouses faith in efficient markets and suspicion regarding the merits of judicial intervention to correct anticompetitive practices.

Several of the School’s founding members, such as Aaron Director and Edward Levi, were members of the Law School’s faculty, as were many of its most distinguished proponents, including Senior Lecturers Richard Posner and Frank Easterbrook. But the School’s influence has spread far beyond the University of Chicago and has contributed significantly to the state of modern antitrust law.

“Antitrust scholars may disagree on the appropriateness of the Chicago School ideas, but few would question the profound influence those ideas have had on US antitrust policy,” said Adam Chilton, Assistant Professor of Law and Walter Mander Research Scholar. Chilton and Filippo Maria Lancieri, a JSD candidate at the Law School, focused their presentation on the Chicago School’s effect on international antitrust regimes. They described their data-driven approach measuring the influence of Chicago principles on how other countries designed their antitrust laws and found the School’s effect was minimal. “The influence of the Chicago School is difficult to measure, but when looking at the substantive laws that countries have adopted, the Chicago School’s international penetration was less pervasive than many would imagine.”

The annual symposium, planned by members of the student-run Law Review, was inspired by mounting speculation that antitrust law is failing. Some scholars argue that the United States has a market concentration problem, with few companies dominating many industrial sectors, and that the Chicago School’s conservative influence enabled that consolidation. They point to the dearth of enforcement actions brought against monopolies and the few cases challenging mergers since the Chicago School gained prominence. They further argue that new anticompetitive risks posed by tech giants like Google, Facebook, and Amazon require new legal solutions.

Proponents of the Chicago School counter that efforts to abandon the consumer welfare standard are a misguided throwback to the incoherent antitrust regime of the mid-twentieth century. They caution against allowing economic populism to turn the focus of the antitrust regime away from economic efficiency.  

The symposium featured the full spectrum of views on whether the Chicago School should be reassessed. Professor Maurice Stucke of the University of Tennessee College of Law and Professor Marshall Steinbaum of the University of Utah argued against the consumer welfare standard, saying “the sad reality…is that competition, under the consumer welfare standard, has diminished significantly in many markets. The consumer welfare standard, it turns out, benefited neither consumers nor their welfare.”

In its place, Professors Stucke and Steinbaum proposed an “effective competition standard,” which they believe will improve antitrust law by returning it to its initial aim of dispersing private economic power. Their standard would consider factors beyond consumer welfare, including the interests of downstream purchasers, labor, and producers, and synthesize these factors into legal presumptions, which lawyers could more easily explain to their clients, antitrust agencies could more easily enforce, and courts could more predictably apply.

Timothy Muris, professor of law at The Antonin Scalia Law School and former Chairman of the FTC, and Jonathan Nuechterlein, antitrust attorney at Sidley Austin and former General Counsel for the FTC, argued vigorously in favor of the consumer welfare standard. They noted the standard was not invented in the Chicago School of the 1960s and 1970s but represented a logical continuation of consumer-focused analysis developed during preceding decades. In their view, arguments that antitrust should weigh interests other than those of consumers have been floated in the past and have failed because “alternatives are not workable…they have no coherent means of resolving competing policy objectives.”

Rohit Chopra, commissioner of the FTC, and Lina Khan, fellow at Columbia Law School, focused on how the FTC can enforce antitrust law more efficiently. They argued that the FTC should focus on crafting rules pursuant to Section 5 of the Federal Trade Commission Act, which prohibits unfair methods of competition. They claimed rules would provide market participants with ex-ante guidance and would promote greater consistency in antitrust enforcement. They contended rulemaking would be a complement to adjudication that could save government resources overall.

Robert Muttilainen, ’19, symposium & reviews editor of the Law Review, said he found the symposium compelling.

“The presentations were exciting and sparked some very lively debates. The Law Review was able to attract some of the best antitrust experts in the country to think about a topic that is drawing more and more attention lately. I am intrigued to see how antitrust enforcement will continue to develop,” he said.