When antitrust’s consumer welfare standard and ESG collide

October 4, 2021
merged chess pawns

The consumer welfare standard has been a subject of intense interest and debate recently in the U.S., punctuated by the 19-hour debate session in Congress in late June, the July executive order aimed at promoting competition in the U.S. economy, the Federal Trade Commission’s 3-2 vote on Sept. 15 to withdraw its approval of the 2020 Vertical Merger Guidelines and the Sept. 22 memo from the FTC Chair Lina Khan regarding her vision and priorities for the organization.

Under the consumer welfare standard, firm conduct is analyzed according to whether consumers in a relevant market are harmed. Often, critics of the consumer welfare standard have advocated for an increased focus on industry structure and concentration. But collaboration among firms related to environmental, social and corporate governance, or ESG, raises different types of questions than those commonly debated between the Chicago and New Brandeis schools of antitrust.

In this Law360 article, Joshua Sherman explores how the current reassessment of the consumer welfare standard is particularly relevant for purposes of evaluating whether ESG-related agreements are anti-competitive.