Abstract
Consumers have been left out of the great debate over the mission of the firm, in which advocates of shareholder value maximization face off against advocates of corporate social responsibility, who would allow management leeway to allocate profits to workers and other non-shareholder insiders of the firm. The consumer welfare standard adopted by antitrust law in the 1970s requires that the firm allocate its profits neither to shareholders nor to workers or other firm insiders. Instead, the standard requires that firms strive to have no profits at all, by charging the lowest possible prices for the best quality products. Such a profit minimization requirement, which, as federal law, binds all state-level corporate law regimes, preserves incentives for businesses to perform efficiently because any incentive payments necessary for efficiency count as costs, not profits, and can therefore be retained by firms.
Document Type
Article
Publication Date
6-2020
6-29-2022
Repository Citation
Woodcock, Ramsi, "The Antitrust Case for Consumer Primacy in Corporate Governance" (2020). Law Faculty Scholarly Articles. 696.
https://uknowledge.uky.edu/law_facpub/696
Notes/Citation Information
Ramsi Woodcock, The Antitrust Case for Consumer Primacy in Corporate Governance, 10(4) UC Irvine L. Rev. 1395-1453 (2020).