Antitrust as Racial Equity: Is a Neo-Brandeisian “Second Wave” on the Way?

The neo-Brandeisian movement has radically transformed the antitrust debate (for the worse) in the span of just a few years, and its champions now form the leadership of both the Department of Justice (DOJ) and Federal Trade Commission (FTC) under the Biden administration. At its core, two common refrains stand out in the neo-Brandeisians’ siren song: First, that protecting democracy is a goal of antitrust law. Second, the corollary that democracy is threatened by large corporations (especially technology companies) and concentrated markets. While both positions are at best highly contestable, they have resonated with a significant number of policymakers and commentators on both sides of the political aisle.

Democracy is about liberty, or the question of whether it is the many, the few, one, or the law, that makes decisions—or perhaps some combination of these. In this sense, America already is an economic democracy. Although there are winners and losers, the many participate in economic life without restrictions as to anyone’s ability to own land or enter into a specific trade or business. This contrasts with, for example, feudalism, where the mass of peasantry is bound to land owned by the few. But equality, and specifically the question of racial, class, or gender restrictions on the enfranchised group, is a separate issue from liberty and democracy. For example, at the American founding, there was political democracy, but only propertied white men were enfranchised.

So understood, neo-Brandeisianism is about economic equality: The difference between concentration and deconcentration is not a lack of economic liberty or democracy in the sense described, but rather equality vis-à-vis the balance of market power between firms. With their de facto class-based antitrust revolution set in motion, there is now a growing crescendo among neo-Brandeisians and their allies to argue that antitrust law should move to address economic inequalities involving race. For example, FTC Commissioner Rebecca Slaughter has stated that the FTC should “play a role in racial equity” and that antitrust “can and should be [] antiracist.” And, just recently, Synda Mark, Deputy Assistant Director of the FTC’s Office of Policy and Coordination, reaffirmed that “antitrust agencies do have a role to play in addressing what a more racially equitable society looks like.”

Notwithstanding that “first wave” neo-Brandeisianism expressly disclaimed the idea that antitrust law should fight social inequality, the idea of a “second wave” neo-Brandeisianism oriented toward racial equity should be taken seriously, especially given both the institutional and intellectual power the movement has already achieved. Moreover, as Commissioner Slaughter noted, such policies are already operative in jurisdictions like South Africa—an economy, it should be added, that the IMF found is performing very poorly. Indeed, like first-wave neo-Brandeisianism, a race-focused antitrust approach as a second wave of neo-Brandeisianism may be able to garner considerable support among policymakers.

But what would an “antiracist antitrust” look like? As commentators have detailed, such an agenda could condemn business conduct that may be pro-competitive on balance, but harm minority consumers or workers. Additionally, the government could block a merger that lowers prices for all consumers but harms minority-owned competitors—all to promote racial equity at the cost of consumer welfare gains. To be sure, an ironic feature of this sort of antiracist antitrust program is that its goal—racial equity— would appear to be somewhat in tension with the gestalt of the broader progressive movement that gave rise to antitrust. Specifically, for many in the early progressive movement racial differences and even hierarchy were not only treated as scientific facts, but grounds for discrimination.

Without question, any antiracist antitrust theory will be plagued by several seemingly intractable problems, foremost of which concerns the lack of any even plausibly compelling explanation for how racial equality inheres in the purpose of the antitrust laws. Whereas the first-wave neo-Brandeisians have at least attempted to draw from legislative history to argue that the antitrust laws were aimed at protecting democracy, it is entirely unclear where they would find similar evidence for racial equity as a goal of the antitrust laws, not least because much of their support came from Southern Democrats acting in opposition to the then-Yankee dominated industrial concerns.

Moreover, identity is not about just race and color, but also can include things like ethnicity and religion. As such, any antiracist antitrust paradigm must justify why these other parts of identity would be ignored and, if not, how tradeoffs would be handled. For example, suppose a transaction reduces disparities between whites and non-whites but increases disparities between Mexican Americans and Japanese Americans, or Catholics and Calvinists. Not only is it absurd to envision antitrust agencies making such tradeoffs, but it would seem impossible to determine whether, say, race-based or ethnic disparities should be seen as necessarily more important.

At bottom, a second-wave, race-based neo-Brandeisianism, like its predecessor—which brought the movement out of the ivory tower and into the halls of power—is a theory almost certainly best left untested in the real world. That is, just as the first wave of neo-Brandeisianism came to power largely on the back of flawed legal and economic analyses, a second wave focused on racial equity seems similarly devoid of legal or economic justification. To be sure, none of this is to say that the antitrust authorities shouldn’t continue to address anticompetitive conduct or anti-consumer mergers that harm minority communities. But to treat racial equity as a goal of antitrust would constitute a profound error that would harm the American economy as a whole in which we all have a stake.