A Reputational View of Antitrust’s Consumer Welfare Standard

A reform movement is underway in antitrust. Citing prior enforcement failures, deviations from the original intent of the antitrust laws, and overall rising levels of sector concentration, some are seeking to fundamentally alter or altogether replace the current consumer welfare standard, which has guided courts over the past fifty years. This policy push has sparked an intense debate over the best approach to antitrust law enforcement. In this Article, we examine a previously unexplored potential social cost from moving away from the consumer welfare standard: a loss in the information value to the public from a finding of liability. A virtue of the current standard is the knowledge that firms who violate the antitrust laws have harmed consumers. This simple reality is a direct, easy-to-interpret signal to market participants and investors. In contrast, a broader and more nebulous standard—such as a “public interest” approach, which has been proposed by some academics and agency officials—could conceivably water down the information value of a finding of liability. In essence, the greater the license that regulators and courts have to condemn a business practice beyond a finding of harm to consumers, the noisier the signal to the public about what the verdict means. We can call this phenomenon “the stigma dilution effect.” To that end, we develop a formal model to gain insight into the role of reputation in the enforcement and deterrence effects of antitrust laws. The model reveals that broadening the welfare standard is likely to weaken the reputational impact of antitrust violations. This dilution can, in turn, have implications that go against what the proponents of abolishing the consumer welfare standard desire. Namely, a new standard could increase, rather than decrease, the frequency of conduct they seek to deter. Thus, our analysis suggests there may be important and underappreciated costs associated with departures from the consumer welfare standard. In fact, the presence of reputational considerations suggests that these departures can produce effects contrary to the stated goals of their proponents

Acute effects of elevated NEFA on vascular function: a comparison of SFA and MUFA

There is emerging evidence to show that high levels of NEFA contribute to endothelial dysfunction and impaired insulin sensitivity. However, the impact of NEFA composition remains unclear. A total of ten healthy men consumed test drinks containing 50 g of palm stearin (rich in SFA) or high-oleic sunflower oil (rich in MUFA) on separate occasions; a third day included no fat as a control. The fats were emulsified into chocolate drinks and given as a bolus (approximately 10 g fat) at baseline followed by smaller amounts (approximately 3 g fat) every 30 min throughout the 6 h study day. An intravenous heparin infusion was initiated 2 h after the bolus, which resulted in a three- to fourfold increase in circulating NEFA level from baseline. Mean arterial stiffness as measured by digital volume pulse was higher during the consumption of SFA (P,0·001) but not MUFA (P¼0·089) compared with the control. Overall insulin and gastric inhibitory peptide response was greater during the consumption of both fats compared with the control (P,0·001); there was a second insulin peak in response to MUFA unlike SFA. Consumption of SFA resulted in higher levels of soluble intercellular adhesion molecule-1 (sI-CAM) at 330 min than that of MUFA or control (P#0·048). There was no effect of the test drinks on glucose, total nitrite, plasminogen activator inhibitor-1 or endothelin-1 concentrations. The present study indicates a potential negative impact of elevated NEFA derived from the consumption of SFA on arterial stiffness and sI-CAM levels. More studies are needed to fully investigate the impact of NEFA composition on risk factors for CVD