'Trust Busting' Isn't Really About Monopoly Power

For decades, the public has been led to believe antitrust is about curbing monopolies—but in reality, enforcement serves political power, not the welfare of consumers.

Shortly before Valentine’s Day, Gail Slater, the head of antitrust enforcement at the Department of Justice (DOJ), announced she was leaving “with great sadness.” Accounts of the split vary, but Slater appears to have been the loser of an internal political struggle at the White House and given a choice: resign or be fired. Whether the action was warranted is debatable, but many say the departure of Slater, an antitrust hawk, will weaken antitrust enforcement in Washington.

For right-wing populists and progressives, this is unwelcome news. Slater’s departure was sharply criticized by progressive Senator Elizabeth Warren, who fumed about corruption and suggested the move would make affordability worse. Meanwhile, the Financial Times said Slater’s ouster is a clear rebuff to populist Republicans, particularly Vice President JD Vance, an antitrust enthusiast and Slater ally who has called for breaking up Google.

Warren and Vance might seem like strange bedfellows, but the antitrust movement was born in bipartisanship. From the start, efforts to restrain corporations were less about party ideology than about balancing economic power with political authority. Though the Republican Party was often seen as the party of laissez-faire, Republican lawmakers helped pioneer the first federal efforts to curb industrial trusts.

In the late nineteenth century, John Rockefeller consolidated his oil empire, Standard Oil, through mergers, acquisitions, and competitive pricing. Every business student knows what came next. Public outrage prompted Congress to pass the Sherman Antitrust Act in 1890. The House passed the legislation unanimously. The Senate passed it by a 51-1 margin.

The Clayton Antitrust Act of 1914, which expanded federal authority and gave the DOJ and the Federal Trade Commission (FTC) greater power to challenge “uncompetitive” practices, also enjoyed broad bipartisan support. And Republican Theodore Roosevelt, the famed “trustbuster,” and Democrat Woodrow Wilson shared both a deep suspicion of corporate power and a willingness to use federal power to curb corporate concentration. In the decades that followed, the idea that “big is bad” dominated in Washington, shaping federal policy and the courts. It was not uncommon for mergers to be blocked simply because they increased a company’s market share.

That approach, however, eventually waned, in no small part due to contributions from the Chicago School. Scholars such as Robert Bork and Richard Posner, along with Nobel laureate economists like George Stigler and Milton Friedman, reframed antitrust around a clearer standard: consumer welfare. In his 1978 book The Antitrust Paradox, Bork laid out this new antitrust vision.

“The only goal that should guide interpretation of the antitrust laws is the welfare of consumers,” Bork wrote. “Departures from that standard destroy the consistency and predictability of the law; run counter to the legislative intent, as that intent is conventionally derived; and damage the integrity of the judicial process by involving the courts in grossly political choices for which neither the statutes nor any other acceptable source provide[s] any guidance.”

The novel idea that the welfare of consumers should be considered, and not mere size, was a simple but radical concept. Over time, courts adopted a stricter scrutiny of antitrust, one that was less antagonistic toward large companies unless there was evidence of consumer harm.

This did not stop either Republican or Democratic administrations from pursuing antitrust cases aggressively; enforcement increased under both the Clinton and George H. W. Bush administrations. Still, antitrust reached a fever pitch during the Biden years under FTC Chair Lina Khan.

As a law student at Yale, Khan signaled her interest in jettisoning the consumer welfare standard in favor of one that considered the broader “ills and hazards” of corporate concentration. Following her FTC appointment, The New York Times reported that she aimed to “upend antitrust standards.” In doing so, she displayed not just a willingness to challenge the prevailing consumer-welfare framework, but to drag companies into legal wars of attrition. “Ms. Khan appears to be prepared for long legal battles,” the Times reported, “even if the cases do not end up going the FTC’s way.”

That perspective helps explain why Khan blocked the $24.6 billion Kroger–Albertsons merger, even though it was projected to lower consumer prices and would have accounted for less than two percent of the US grocery market. Yet Khan prevailed—no doubt because the companies feared continuing protracted legal battles that had already stretched for two years.

The Kroger–Albertsons merger was far from the kind of dominant monopoly typically highlighted in economics textbooks. But that is the dirty secret: most antitrust cases don’t involve actual monopolies.

For years, economists have pointed out that natural monopolies are “virtually non-existent” in the real world. Where monopolies do exist, they tend to be the result of government intervention, not “market failures.”

In his 1996 book Antitrust and Monopoly: Anatomy of a Policy Failure, economist Dominick Armentano reviewed dozens of the most infamous monopolies in US history. He concluded that virtually all of them were the result of government protection, not an unfettered marketplace. “The general public,” wrote Armentano, “has been deluded into believing that monopoly is a free-market problem, and that the government, through antitrust enforcement, is on the side of the ‘angels.’ The facts are exactly the opposite.”

Looking at the state of antitrust today, it increasingly appears to be rooted more in a hostility to “bigness” than in a principled concern for consumers. This is folly. Size alone is not evidence of economic harm. In many industries, scale is precisely what allows firms to better serve customers.

Mergers and acquisitions don’t always succeed, but when they do, they generate real economic benefits. They enable companies to achieve economies of scale, cut overhead, integrate new technologies, and streamline supply chains. They also foster entrepreneurship and allow stronger firms to rescue struggling ones.

Conversely, blocking transactions like these can cause real economic harm. In 2022, Amazon announced a $1.7 billion acquisition of iRobot, a company facing significant challenges. The deal was abandoned after regulatory scrutiny—a result Khan later took credit for in congressional testimony. Layoffs soon followed at iRobot, and the company ultimately filed for bankruptcy before being scooped up by a Chinese manufacturer.

It’s hard to see how this benefited consumers. Nevertheless, Khan may regard the enforcement as a victory. After all, she was tapped to lead the transition team of New York’s newly elected socialist mayor, Zohran Mamdani, whose political rise was fueled by opposition to corporate power.

Perhaps more concerning is the right’s newfound interest in aggressive antitrust. A large faction of the populist right—led by Vance, who has declared Google “dangerous”—is hostile to “bigness.”

Like Khan, populists on the right claim their goal is to level the playing field by rooting out “anti-competitive behavior.” More plausibly, they have learned something from their counterparts on the left: anticorporate sentiment polls well. Public choice theory reminds us that politicians respond to incentives, and attacking firms like Google and Amazon is an easy way to signal toughness while courting voters who distrust large corporations.

Yet that faction may be giving ground to a more pragmatic coalition, one led by a president who still sees himself as “a dealmaker.” At Semafor, journalist Liz Hoffman reports that Slater’s ouster is a clear signal that “remedies are back on the table” for companies looking to make big moves—just be prepared to offer something in return.

“The advice to clients that have transactions likely to face scrutiny is to come ready with something to offer,” said antitrust lawyer Tim Cornell. In other words, it appears to be open season for mergers and acquisitions—at least for companies willing to play ball.

It’s a cruder approach than the consumer-welfare standard. Yet it underscores a long-standing truth: antitrust has long been more about political power than monopoly power. The danger, of course, is that once enforcement turns explicitly political, it invites rent-seeking, regulatory favoritism, and the selective targeting of disfavored firms. That is a Pandora’s box better left closed.