Reframing Antitrust Law as an Environmental Problem

Credit to Simon Holmes

Reframing Antitrust Law as an Environmental Problem

In the business sector, industry-wide collaboration is critical to addressing climate change. However, antitrust law in the United States deters such partnerships. Antitrust doctrine could be adjusted to support climate progress if environmental impacts are reframed as economic factors.

Amelia Miazad, Prosocial Antitrust, 73 Hastings L.J. 1637 (2022).
Available at:

Gasparini, Matteo, Knut Haanaes, and Peter Tufano. “When Climate Collaboration Is Treated as an Antitrust Violation.” Harvard Business Review (website) (October 17, 2022). View Details

Light, Sarah E., The Law of the Corporation As Environmental Law (January 30, 2019). 71 Stanford Law Review 137 (2019), Available at SSRN:

Simon Holmes, Climate change, sustainability, and competition law, Journal of Antitrust Enforcement, Volume 8, Issue 2, July 2020, Pages 354–405,

Antitrust law is designed to protect consumers. But meaningful action on climate change, which will certainly help consumers in the long run, is currently bogged down by antitrust considerations. An example of this can be found in the Glasgow Financial Alliance for Net Zero (GFANZ), a multi-trillion-dollar coalition of financial institutions that guides organizations in reaching net zero. In 2022, the criteria for joining GFANZ tightened. The new criteria required GFANZ members to publish a transition plan within a year of joining the campaign, to commit to achieving net-zero emissions across their entire value chain, and to align lobbying efforts with a clean energy future. However, GFANZ proceeded to drop these requirements in wake of antitrust accusations: specifically, that the coalition was funneling money away from the fossil fuel industry. Thus, while antitrust law is focused on consumer protection, it has unintended consequences for the environment.

To appreciate why antitrust law can prevent climate progress, it is important to understand the origins of antitrust. In the 1800s, Standard Oil Company controlled 90 percent of American refineries. The company gained monopoly power that allowed them to manage product supply, extinguish competition, and reduce consumer choice. With this control, Standard Oil could raise prices and lower quality with little consequence. Other business conglomerates similarly controlled the sugar, meat, steel, and tobacco industries at this time.

Public frustration over these unopposed companies reached Congress, which responded by developing a new category of antitrust law. In 1890, Congress passed the Sherman Act to restrict any monopolization, attempted monopolization, or conspiracy to monopolize. In 1911, Standard Oil Co. of New Jersey v. United States cited the Sherman Act to break up Standard Oil, splitting the giant corporation into 37 separate companies. This landmark Supreme Court decision cemented a new status quo: no company could have a monopoly on a particular market or industry, and the government had the power to intervene in cases when it believed that a company’s actions were anti-competitive and harmful to consumers.

Over a century later, antitrust regulation has been applied to new industries like aviation and technology. In 2023, the Justice Department and state attorneys general have filed suit to prevent JetBlue from acquiring Spirit Airlines out of concern that the merger would raise passenger fares. Meanwhile, big tech has been accused in recent years of abusing monopoly power to eliminate competitors and dominate their markets. In these cases, antitrust regulation has preserved its intent of protecting consumer welfare.

To make good on its consumer welfare goals, a realignment of antitrust law is needed to promote climate progress in America. In an article recently published in the Harvard Business Review, Matteo Gasparini et al. cites a survey finding 60 percent of companies are deterred from climate collaboration due to antitrust concerns. This is problematic because industry-wide collaboration is critical to address climate change. Collaboration helps mitigate the first-mover disadvantage, challenges that come with being the first firm to change their business strategy. In the context of sustainability, actions businesses take to decarbonize can be costly, resulting in higher prices and lower margins in the short run. So those who invest in sustainable transformation may find themselves at a competitive disadvantage. Collective industry action is one way to resolve this, as it ensures that competitors adopt costly practices simultaneously. Without collaboration, firm-level action is far less likely. Thus, when fear of antitrust violations deters collaboration, it deters climate action more broadly.

In an article published in the Hastings Law Journal, Amelia Miazad echoes this assessment, and points out an additional flaw of antitrust doctrine: it falsely assumes that collaboration on social and environmental goals is anti-competitive. To illustrate this point, Miazad references when four automakers reached a voluntary agreement with the State of California in 2019 to establish vehicle emissions standards that were stricter than national levels. In response, the Department of Justice launched an antitrust probe on the basis that this collaboration was anti-competitive by limiting the vehicle types offered to consumers. Ultimately, the probe was dismissed. While this probe has been criticized as politically motivated, Miazad argues that it underscores the disconnect between economic and non-economic goals in antitrust law. The automakers’ collaboration reflects a recognition that the auto industry is threatened by climate change with heightened physical risks, changing consumer preferences, and supply chain disruption. Addressing this risk is an economic decision that is needed to maintain profitability. Ultimately, Miazad concludes that antitrust law should remain firmly tethered to economic considerations. However, these considerations must also weigh the economic impacts of climate change.

As a solution, Miazad recommends use of the Universal Consumer Standard. The Universal Consumer Standard would allow competitor collaboration if the relevant parties can demonstrate that the collaboration is designed to mitigate a specifically identified systematic risk (i.e., climate change) and that prohibiting the collaboration will reduce the welfare of future consumers (i.e., decreased supply). Notably, this standard aligns with the existing constraints of antitrust law. While some scholars have suggested that social or environmental factors be integrated into antitrust decisions, the Universal Consumer Standard remains rooted in the  economic factors that antitrust law already considers.

Contrary to Miazad’s recommendation, Simon Holmes suggests changing the scope of consumer welfare to account for non-economic factors. The antitrust definition of consumer welfare in the United States remains confined to promoting innovation and low prices. In an article published in the Journal of Antitrust Enforcement, Holmes suggests that welfare is not just about profit or fortune, but also about health and well-being. Thus, if the consumer welfare standard is written into law, it is capable of taking into account non-economic factors. Holmes’ work focuses on the European Union, but his point is applicable to the United States: in both places, climate change is linked to consumer welfare through its effects on clean air and water. Therefore, antitrust doctrine should consider a wider set of goals that focus on both competitive processes and sustainability.

Sarah Light offers a different perspective and argues that antitrust law enforcement can protect consumer interests and serve as an environmentally friendly mandate. In an article published in the Stanford Law Review, Light references a 2011 case from the European Union. Several detergent providers trimmed package size and detergent loads to decrease their environmental impact. Despite reducing unit volume, the firms refused to pass the cost savings on to the consumers. This attempt to rig prices and restrict competition violated antitrust law. The European Commission ultimately fined the detergent companies more than 300 million euros. Light argues the detergent companies feared that being the first to market an environmentally preferable product would create a first-mover disadvantage. To avoid this, the companies formed a cartel and fixed prices. Antitrust law enforcement deters such behavior by exposing and punishing on-face environmental actions that hurt consumers.

In an April 2023 statement, the Managing Director of the International Monetary Fund stated that stronger collaboration across the private sector is vital to address the impacts of global warming. However, businesses will operate within the bounds prescribed to them by policy. In the status quo, perceptions of antitrust regulation hamper necessary climate collaboration. There is a need to re-evaluate how long-standing systems consider systemic risks like climate change. These policies will define the priorities and frameworks within which stakeholders work, ultimately influencing how quickly we reach net-zero.

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