Implications of the New Brandeisian for Japanese Competition Policy: The consumer welfare standard and the market power standard

Author Name KAWAHAMA Noboru (Faculty Fellow, RIETI)
Creation Date/NO. January 2023 23-J-001
Research Project Globalization, Innovation, and Competition Policy
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Concerns about the concentration of economic power in digital platforms have transformed the framework of the debate over competition law (including related areas) over the past few years. One of the driving forces behind this change has been the rise of a position in the United States known as the neo-Brandeis movement. While there has been much praise and criticism of this position, it is hard to deny that it has already become a driving force for regulation. While this position began within academia, it also has an aspect of activism, making it difficult to organize the debate.

At first glance, the "consumer welfare standard" seems self-explanatory, but its usage in the U.S. is quite unique. In Europe and Japan, "consumer welfare standards" have never been dominant in the U.S. sense, nor have "consumer welfare" standards been technically a regulatory standard under Japanese law in the Antimonopoly Law. However, we have adopted a market power standard that is similar in content to the consumer welfare standard, which is generally responsive to the criticisms of the neo-Brandeisan position. On the other hand, it can be pointed out that Japan's market dominance standard differs in the absence of monopoly power regulation. Although the neo-Brandeisian position has been propagated in Japan, it is difficult to accurately evaluate it without an understanding of the differences between Japan and the U.S. with respect to the "consumer welfare standard" and the "market power standard”. While there are few arguments in favor of the neo-Brandeisian position in its entirety, it is an obstacle to understanding the current situation in which arguments that follow a similar logic are gaining ground in popularity in many respects. This DP aims to clarify the implications of the new Brandeis movement for Japan's competition policy by elucidating the problems with the "consumer welfare standard" and the significance of the "market power standard" in the United States.