The antitrust community is facing a demanding question: Is antitrust enforcement ultimately about protecting consumers, competition, or both? This question has sparked debates about the ultimate goals of antitrust law. On one side of the debate, supporters of the consumer welfare standard; and on the other side, supporters of the Neo-Brandeisian standard of enforcement. At this crucial time in the debate of overarching antitrust goals, the Ninth Circuit’s holding in Federal Trade Commission v. Qualcomm Incorporated, one of the most important antitrust cases in the twenty-first century, poses many issues for the consumer welfare standard and antitrust enforcement in the future.
Qualcomm Incorporated (“Qualcomm”) is part of a multi-billion-dollar industry as a dominant supplier of baseband processors and a licensor of patents which enable communications in cell phones and tablets. The Federal Trade Commission brought a case against Qualcomm in response to alleged unreasonable restraints on competition and an unlawful maintenance of a monopoly. The Ninth Circuit reversed the district court’s judgment against Qualcomm, and instead found, among other things, that harm to consumers is outside the relevant market in analyzing an antitrust violation. The Ninth Circuit’s exclusion of consumers from an analysis of anticompetitive harm deviates from established precedent and has already caused a ripple effect distancing antitrust enforcement from its established goals and standards.
Qualcomm’s business practices in question in this case implicate technology present in the daily lives of most U.S. consumers. In reversing the district court’s holding, the Ninth Circuit misunderstood and misapplied fundamental principles of established antitrust law in reasoning that Qualcomm’s conduct “involves potential harm to customers, not its competitors, and thus falls outside the relevant markets.” This grave error is contrary to fundamental principles of antitrust law and could have significant implications by narrowing the interpretation of the Sherman Act for the foreseeable future.
This note addresses the current debate about the ultimate goals of antitrust law, mainly focusing on the Consumer Welfare and the Neo-Brandeisian standards of antitrust enforcement. The lack of clarity and cohesion in antitrust debates about the goals of antitrust have rendered the realm vulnerable to judicial decisions, such as FTC v. Qualcomm, that misapply and misinterpret antitrust standards. This note delineates a potential solution for the lack of clarity as a call to the courts and academics to improve discourse by viewing the protection of consumers and competition as fundamental to antitrust enforcement.
