Consumer Welfare Must Drive FTC Policy

For the first time in recent memory, America’s antitrust enforcer has abruptly dropped two blockbuster cases in a single day (apnews.com). That stunning reversal – quietly shelving Commerce Secretary Lina Khan’s headline fights against Microsoft and PepsiCo – sent shockwaves through the business community. New FTC Chair Andrew Ferguson slammed the Pepsi suit as a “politically motivated” stunt with “little legal basis” (apnews.com) (www.reuters.com). In effect, the agency admitted it pursued high-profile cases for ideological points, not consumer benefit. This wrenching U-turn underscores a simple truth: it’s time to restore the tried-and-true consumer welfare standard to antitrust enforcement.

The Case for Consumer Welfare

Antitrust law has always been about protecting American consumers, not pursuing political agendas or throttling profitable businesses. Since the 1970s, the consumer welfare standard has been the bedrock of antitrust enforcement, focusing on lower prices, more innovation, and greater choice for everyday Americans. Top DOJ officials under a Republican administration have echoed this view, calling antitrust enforcement “a necessary check on the free market” that ultimately benefits consumers (www.reuters.com). In practice, the standard measures outcomes that matter – falling prices, rising output, and continued innovation – instead of broad ideological goals. Even courts have long looked to consumer impact as the guiding star of competition law.

The wisdom of this approach is clear. By centering enforcement on consumer prices and product availability, regulators allowed U.S. industry to flourish for decades on predictable rules. Companies knew that mergers and business practices would be judged on measurable effects for consumers, not social agendas or the political leanings of antitrust chiefs. That stability fueled investment and innovation. It’s no accident that many of the world’s most competitive markets – from tech to consumer goods – thrived under the traditional approach. As one leading analysis noted, the last few years have “reversed decades of permissive policies” and imposed near-constant scrutiny (www.reuters.com). This surge of uncertainty came from abandoning consumer welfare as the lodestar, and it can’t be sustained without harming the economy.

Ideological Antitrust Harms Consumers

Chair Khan’s tenure at the FTC proved how far the agency will stray without consumer focus. She opened enforcement in radical directions – suing national chains and prescription middlemen in the name of price fairness (www.reuters.com), challenging mergers that most economists agreed would cut costs, and even eyeing routine business contracts like noncompete agreements and subscription terms (www.reuters.com). Still, she often failed to show harm to consumers. Wall Street investors complained that her “assertive tactics” have “stifled the merger market” (www.reuters.com). In one dramatic example, Khan insisted the Kroger-Albertsons grocery merger would hike prices, ignoring Kroger’s analysis that scale savings would lower costs (www.axios.com). Critics warned that kind of intervention only chills investment and deters deals that might benefit shoppers through efficiency (www.axios.com) (www.reuters.com).

Indeed, by pursuing antitrust cases for their political headlines, the agency risked real costs. Business groups loudly objected to new enforcement rules and merger challenges, noting higher compliance burdens and delayed deals (www.reuters.com) (www.reuters.com). The U.S. Chamber of Commerce and Business Roundtable warned that recent merger guidelines will drive up red tape and pinch consumers with higher prices (www.reuters.com). Meanwhile, Americans feel the pinch: uncertainty overseas sent manufacturers packing or on pause. When antitrust turns into theater, consumers are the ones who pay, in higher prices and fewer products.

The misguided lawsuits of the waning Biden era illustrate this danger. In its dying days, the FTC sued PepsiCo over alleged price preferences for Walmart – a case so tenuous even the agency’s new Republican leader called it a “partisan misuse of taxpayer funds” (www.reuters.com). One day after a federal court refused to block Microsoft’s big deal, the agency quietly dropped both that merger challenge and the political Pepsi case on the grounds that they “lacked merit” (apnews.com). Microsoft’s own executive hailed the decision as a win for “gamers and regulatory common sense” (apnews.com). These reversals show just how far the FTC had drifted: pursuing headline-grabbing antitrust activism instead of safeguarding the public interest.

Restoring an Economy-Forward Agenda

With Chair Khan departing and a Republican majority incoming (www.reuters.com), a return to consumer-first antitrust is not just possible – it’s imperative. Legislators and new administrators are already moving to retool the system. For example, Congress is debating measures to consolidate and streamline enforcement under the DOJ to ensure consistency (www.reuters.com). Senior DOJ officials – and former winners of antitrust cases – emphasize that vigorous enforcement does not mean ideological crusades, but selectively targeting clear harms to consumers and competition (www.reuters.com) (www.reuters.com).

A credible antitrust policy does not need complexity or social engineering. It should simply ask: Does this business practice or merger hurt American consumers? If the answer is no – if it lowers prices, improves quality, or fosters innovation – the agencies’ job is done. If consumers lose out, then we step in. This was the proven formula during the Reagan and Bush administrations and beyond. Thankfully, the new FTC leadership has already begun clearing out politically charged cases and returning the focus to workers and consumer welfare. The message from Capitol Hill and Main Street is clear: stop sacrificing prosperity on the altar of ideology.

Conclusion

Americans deserve clear rules and real results. Antitrust should empower shoppers with better prices and products — not punish them with uncertain regulation. The consumer welfare standard has been the economy’s grade level for growth for nearly a half-century. It’s time for the FTC to re-embrace that mandate with confidence. In short, regulators should stop playing politics and get back to protecting the consumer. If America does that, our economy and our families will be better for it.

Key References: Conservatives note that even DOJ’s new antitrust chief under Trump stressed pro-market enforcement as a check on monopolies that directly benefits consumers (www.reuters.com). Major news outlets reported the FTC’s recent course reversal, with the chair himself calling former cases like the Walmart-PepsiCo suit “a partisan misuse of taxpayer funds” (www.reuters.com). In highest measure, the triumph of free markets comes from reverting to consumer welfare – the very approach that, for decades, delivered lower prices and more choice to Americans.