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The FTC uses the Consumer Welfare Standard to decide antitrust cases, which means they have to show that a proposed merger would cause tangible harm to consumer

The FTC uses the Consumer Welfare Standard to decide antitrust cases, which means they have to show that a proposed merger would cause tangible harm to consumers. If "reducing competition" was the standard then all buyouts/mergers would be illegal since they all necessarily reduce competition.

pastor_bob 4y ago
Did they use the Consumer Welfare Standard to block Visa's acquisition of Plaid? Seems like the main reasoning they used was because it was a strategic buy rather than a financially sound one. (and the finances of this deal pretty much mirror Plaids)
- MajimasEyepatch 4y ago
  With Lina Khan running the FTC, I definitely expect more scrutiny of this proposal than it would likely have received in the past.
DoneWithAllThat 4y ago
Why did you elide the “substantially” clause?
oyeanuj 4y ago
That's what they have used in the past, and are not bound to it. If you read any of Lina Khan's work, it's clear that they'll take a more holistic view of the impact of lack of competition.
- noelsusman 4y ago
  That's a good point, it's important to note the current FTC chair is working to change the standards that are used. I'm excited to see how that pans out. I think the lack of antitrust enforcement in recent decades is a really underrated problem in American governance.
Ericson2314 4y ago
Consumer welfare is stupid, but all these SAAS rent-seeking makes me feel like you could actually make a case.
kblev 4y ago
I have been thinking about this the other day, and I think buyouts and mergers should be illegal.
- kibwen 4y ago
  This doesn't deserve to be downvoted. Competition is crucial for healthy markets, and the only effect of buyouts and mergers is to consolidate business and decrease competition. If Adobe wants Figma's product, then they can do business with Figma and license it from them. Stop normalizing monopolistic behavior.
  - cheriot 4y ago
    > the only effect of buyouts and mergers is to consolidate business and decrease competition Acquisitions also preserve value in businesses that would otherwise shut down (now or are on a path to). They can create a combined business that's better than the sum of its parts. For example, Apple acquiring Next. Pro-competition / anti-monopoly doesn't require throwing the baby out with the bath water.
  - spacemadness 4y ago
    I feel like Hacker News probably isn’t the place to see folks upvote against acquisitions.
cmeacham98 4y ago
It's not "reducing competition", it's "___substantially___ reducing competition". The difference matters.
connor11528 4y ago
Consumer welfare standard is not a law enacted by Congress its just something a lawyer named Robert Bork that was rejected from the Supreme Court popularized in the 70s. It was pre-internet and couldn’t comprehend platform firms like Amazon that price below cost for years to win a market and kill competition

pastor_bob 4y ago

Did they use the Consumer Welfare Standard to block Visa's acquisition of Plaid? Seems like the main reasoning they used was because it was a strategic buy rather than a financially sound one. (and the finances of this deal pretty much mirror Plaids)

MajimasEyepatch 4y ago
With Lina Khan running the FTC, I definitely expect more scrutiny of this proposal than it would likely have received in the past.

DoneWithAllThat 4y ago

Why did you elide the “substantially” clause?

oyeanuj 4y ago

That's what they have used in the past, and are not bound to it. If you read any of Lina Khan's work, it's clear that they'll take a more holistic view of the impact of lack of competition.

noelsusman 4y ago
That's a good point, it's important to note the current FTC chair is working to change the standards that are used. I'm excited to see how that pans out. I think the lack of antitrust enforcement in recent decades is a really underrated problem in American governance.

Ericson2314 4y ago

Consumer welfare is stupid, but all these SAAS rent-seeking makes me feel like you could actually make a case.

kblev 4y ago

I have been thinking about this the other day, and I think buyouts and mergers should be illegal.

kibwen 4y ago
This doesn't deserve to be downvoted. Competition is crucial for healthy markets, and the only effect of buyouts and mergers is to consolidate business and decrease competition. If Adobe wants Figma's product, then they can do business with Figma and license it from them. Stop normalizing monopolistic behavior.
- cheriot 4y ago
  > the only effect of buyouts and mergers is to consolidate business and decrease competition Acquisitions also preserve value in businesses that would otherwise shut down (now or are on a path to). They can create a combined business that's better than the sum of its parts. For example, Apple acquiring Next. Pro-competition / anti-monopoly doesn't require throwing the baby out with the bath water.
- spacemadness 4y ago
  I feel like Hacker News probably isn’t the place to see folks upvote against acquisitions.

cmeacham98 4y ago

It's not "reducing competition", it's "___substantially___ reducing competition". The difference matters.

connor11528 4y ago

Consumer welfare standard is not a law enacted by Congress its just something a lawyer named Robert Bork that was rejected from the Supreme Court popularized in the 70s. It was pre-internet and couldn’t comprehend platform firms like Amazon that price below cost for years to win a market and kill competition