Reconsidering Welfare

Scholars Panel on Non-Price Effects: Turning Smoke Into Fire

Abstract

Recent amendments to Canada’s Competition Act expanded the list of potential factors to determine an impact on competition for mergers, competitor collaborations and abuse of dominance. Though a part of a nonexhaustive list of factors the Competition Bureau and Competition Tribunal can consider, the additional factors are a signal from the government of a desire for a broader conception of the dimensions of competition. That desire is likely to be frustrated however by a competition law framework, and in particular a merger enforcement framework, guided by estimating welfare tradeoffs. Building on the policy conversation  surrounding the consumer welfare standard in the United States, the more general welfare frame for antitrust analysis is limited because of its outdated and incomplete conception of welfare, its tendency to narrow analysis to quantitative and short-term factors, and its contribution to an increasingly unwieldy and inequitable body of law. The federal government’s 2022-23 consultation and review of the Competition Act presents an opportunity for Canada to reconsider the welfare frame as the foundation for the future of its competition law. To begin that process of reconsideration, two potential paths diverting from the welfare frame, Wu’s competitive process standard and Posner’s market power north star, are put forward to inform a post-welfare competition policy in Canada.