Previously, we reported on the Federal Trade Commission’s effort to derail a merger in the “superpremium” ice cream market. The story, it turns out, has garnered significant media attention, to the point where two senior FTC officials felt the need to publicly denounce those of us who have the gall to question the wisdom of antitrust enforcement.

On March 12, Wall Street Journal columnist Holman Jenkins authored an excellent critique of the FTC’s efforts to stop the Nestles-Dreyer’s ice cream merger. Jenkins thesis cut right to the chase: this case has nothing to do with law or protecting “consumers,” but rather was an example of the FTC trying to justify its existence. With true monopolies nowhere to be found in the private sector, the FTC now resorts to inventing phantom monopolies in order to justify its annual budget (and to make the careers of upstart FTC lawyers.)

Not surprisingly, the FTC sees things differently. In a letter to the Journal, FTC general counsel William Kovacic and Bureau of Competition Director Joseph Simons denounced Jenkins–and by extension, all antitrust opponents–for failing to see the moral necessity of the FTC’s case against Nestle-Dreyer’s:

In his March 12 column (“FTC Screams for Antitrust”), Holman Jenkins Jr. reissues his perennial call for abolishing the antitrust laws. A frequent defender of the oppressed cartel classes, Mr. Jenkins rebukes the unanimous decision by the FTC–a body of three Republican and two Democratic appointees–to challenge Nestlé’s $2.8 billion proposed acquisition of Dreyer’s Ice Cream.

His critique of the FTC’s opposition to the Nestles/Dreyer’s merger reveals an indifference to consumer welfare. Is Mr. Jenkins saying that if prices to consumers would increase after the acquisition, tough luck? Or is it simply that even if the FTC had empirical evidence that prices likely will rise after the merger, Mr. Jenkins knows better because, well, just because…?

Perhaps mere intuition should replace empirical analysis in determining whether competition among the three major super-premium competitors (Nestles, Ben & Jerry’s, and Dreyer’s) significantly affects super-premium prices. So, for example, Mr. Jenkins would ignore the fact that Dreyer’s roll-out of super-premium brands caused a substantial competitive response, and prices fell. Of course, had Nestles owned Dreyer’s, this competitive response never would have occurred. But, since this roll-out and the development of the super-premium market occurred after a 1988 court decision cited by Mr. Jenkins, in Mr. Jenkins view it seemingly never happened.

The first phrase that strikes you is the accusation that Jenkins possesses “an indifference to consumer welfare.” That statement is unproven on many fronts. First, opposition to antitrust does not necessarily mean opposition to “consumer welfare”; indeed, those of us who advocate unfettered capitalism believe that a free market–free, that is, of antitrust–is far more beneficial to consumers than any government-planned economic system. After all, capitalism rewards businesses that satisfy their customers, while antitrust rewards businesses that satisfy the whims of government regulators.

But even presuming, arguendo, that antitrust laws are beneficial to “consumer welfare,” that does not ethically justify the FTC’s actions. The purpose of government, after all, is to protect individual rights, not the prerogatives of any particular interest group–and in this context, “consumers” are a favored interest group afforded special privileges by the FTC. Stripped of prissy legalisms, the FTC’s actions amount to forced redistribution of wealth: they propose to deny Nestle and Dreyer’s the right to benefit from their own property in order to provide lower prices for consumers. This completely ignores the fact that without the efforts of these companies, there would be no “superpremium” ice cream in the first place for consumers to purchase.

Also consider the conditional statement, “even if the FTC had empirical evidence that prices likely will rise after the merger…” Even if? Does this mean the FTC has no empirical evidence in support of their case against Nestle & Dreyer’s? If so, that’s hardly a surprise. In the overwhelming majority of antitrust cases, the government presents little or no actual evidence in support of its claims. Indeed, the government often argues they need not produce any proof that consumers were actually harmed–it is sufficient, for antitrust purposes, to only show a potential harm might develop if businesses are left to their own judgments. Couched in such a nonsensical series of hypothetical, antitrust is the perfect legal weapon: non-objective “law” that substitutes fear for proof, and force for reason.

Many current and former antitrust lawyers are well aware of their profession’s true nature. R.B. Rogers, a retired antitrust lawyer, offered these thoughts on Donald Luskin’s website:

When I started practicing law in 1964, antitrust law was based upon a series of perfectly silly judicial decisions, and government guidelines based upon those decisions. Nobody could merge with any competitor, for example, not even two grocery stores on adjacent corners at one geographic location-the now infamous Von’s case. Virtually every restraint of trade was “per se,” unlawful, a legal conclusion which avoided the necessity of proving that a challenged practice had any anticompetitive effect.

Rogers also discusses how regulators manipulate market definition to make their cases:

Once upon a time, I represented Orange Crush (remember?) in an FTC proceeding against all of the major soft drink companies. Each brand(!!!!) was gerrymandered into a “market.” Thus, Orange Crush (with less than 2%) of soft drink sales, had monopoly power in the (tah-dah!) “carbonated orange drink market.” Dr. Pepper, that giant among soft drinks, had an absolute monopoly of the “pepper flavored cola market.”

In the Nestle-Dreyer’s case, the FTC arbitrarily took three brands of ice cream, and declared them a “market” separate from all other ice cream brands sold. This alone ignores the supposedly cardinal rule of market definition: a market is composed of products that are reasonable substitutes for one another. Hence, the FTC is arguing that consumers of Ben & Jerry’s would never consider purchasing a generic brand of ice cream instead. This defies common sense, to say nothing of the “empirical evidence” the FTC claims they might have.

The FTC’s only defense for their actions is their exclusive (some would say fanatical) focus on short-term consumer prices. If a merger of two companies causes consumers to pay more, the merger must violate antitrust law in some way. This is not a reasoned argument, but an article of faith accepted by every FTC attorney–it is a product of the “mere intuition” Kovacic and Simons accuse Holman Jenkins of relying on. Indeed, the FTC knows their actions are rationally indefensible, which is why they rely on smearing their opponents and tossing around floating abstractions like “consumer welfare” to justify what they’re doing.

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S.M. Oliva

S. M. Oliva is president of Citizens for Voluntary Trade and a senior fellow at the Center for the Advancement of Capitalism.