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Bloomberg Law – ICLE Senior Scholar Daniel Gilman was quoted by Bloomberg Law in a story about a challenge before the 7th U.S. Circuit Court of Appeals regarding so-called “no-poach” agreements among McDonald’s franchisees. You can read full piece here.

Daniel Gilman, senior scholar at the International Center for Law & Economics, doesn’t believe this type of agreement is unlawful, but said if the courts don’t allow it franchises will figure out ways to deal with that, as some of them have already.

…Current FTC leadership wants to get at both vertical and horizontal constraints, Gilman, a former FTC attorney advisor, said, but “we’re not looking at an FTC or DOJ investigation” here.

The FTC is “trying to develop this new position and blend what have long been considered distinct routes to analyzing vertical and horizontal restraints, so part of this may be planting the flag for them. But I don’t buy it,” Gilman said.

National Review – ICLE Scholars Brian Albrecht, Dirk Auer, Eric Fruits, and Geoffrey A. Manne were cited by National Review in an item about ICLE’s white paper on “doomsday mergers.” You can read full piece here.

Economists at the International Center for Law and Economics have written a paper looking back at a different species of false alarm that we often hear from the media: doomsday mergers.

Brian Albrecht, Dirk Auer, Eric Fruits, and Geoffrey Manne recount the predictions made about six mergers that were allowed to take place despite considerable backlash from progressives. They looked at Amazon’s purchase of Whole Foods, consolidation in the beer industry, Bayer’s purchase of Monsanto, Google’s purchase of Fitbit, Facebook’s purchase of Instagram and WhatsApp, and Ticketmaster’s merger with Live Nation.

“Our retrospective analysis shows that many of the alarmist predictions of the past were completely untethered from prevailing market realities, as well as far removed from the outcomes that emerged after the mergers,” they write.

They look at indicators such as stock prices, market share, and financial performance to evaluate the claims made by progressives before the mergers took place. The paper has copious citations to news reports, academic papers, and relevant statistics to back up their analysis.

New Civil Liberties Alliance – The International Center for Law & Economics was mentioned by the New Civil Liberties Alliance in a media release regarding Judge Lewis Liman of the U.S. District Court for the Southern District of New York citing the amicus brief filed jointly by ICLE and NCLA in moving to dismiss the Bystolic antitrust litigation. You can read full release here.

“The Court agrees with the argument in the amicus brief from the New Civil Liberties Alliance and the International Center for Law and Economics that the appropriate question is the “net” benefit conferred by the reverse payment and not its gross size vel non.”

In its amicus brief, NCLA argued that Congress has long mandated that courts should strive to maintain a balance between the sometimes-competing claims of the patent law and antitrust law, and that antitrust law should not be used to shortchange the rights of patent holders. NCLA’s successful amicus curiae brief was joined by the International Center for Law and Economics.

Reason – ICLE Scholars Brian Albrecht, Dirk Auer, Eric Fruits, and Geoffrey A. Manne were cited by Reason in an item about ICLE’s white paper on “doomsday mergers.” You can read full piece here.

A new paper from the International Center for Law & Economics (ICLE) looks at panicky predictions about past business mergers that haven’t panned out as the doomsayers warned. The paper comes as the Federal Trade Commission (FTC) and the Department of Justice “prepare to release updated federal merger guidelines that the agencies say will better detect and prevent illegal and anticompetitive deals,” notes ICLE in a press release. But bureaucrats and politicians don’t have a great track record on predicting the effects of particular mergers, suggest Brian Albrecht, Dirk Auer, Eric Fruits, and Geoffrey A. Manne in “Doomsday Mergers: A Retrospective Study of False Alarms.”The authors point to alarms sounded over Amazon’s 2017 purchase of Whole Foods, Bayer’s 2018 merger with Monsanto, Google’s 2019 purchase of Fitbit, and Anheuser-Busch InBev’s 2016 acquisition of SABMiller. In the latter case, “critics claimed [the acquisition] would increase the price of beer and decimate the burgeoning craft-beer segment,” they write:

Instead, the concentration of the beer industry decreased after the mergers, prices did not increase on average, and the craft-beer segment thrived. This is not to say that all is rosy; the price of some beers did indeed increase after the wave of mergers. Regardless, it is clear the post-merger outcome was a far cry from the doomsday scenario that critics predicted.

People feared that Google’s purchase of Fitbit would lead to consumer privacy violations and make Google more dominant in advertising, because Google would use data from the devices in its advertising business. “The fear was that, by purchasing Fitbit, Google would be in a position to better target ads throughout its entire platform, thereby increasing its hold on the broader advertising industry,” note the authors. But:

Four years on, however, the opposite appears to have happened. From 2017 to 2022, Google’s share of online advertising spend has steadily declined, falling from 34.7% to 28.8%.118 And it is not just in relative terms; the company’s quarterly earnings reports show a clear decline in ad revenue, including year-over-year drops in the fourth quarter of 2022 of 8.6% for the Google network and 7.0% for YouTube. As usual, critics may retort that Google’s revenues and market shares would have declined even more absent the merger but, once again, that was not the initial claim. Instead, they wrote that the merger would give Google an unbreakable grip on the online-advertising industry—the “horse has bolted” as Gregory Crawford put it—and that has not been the case.

You can read the full report here. The authors conclude with a warning: “We should be skeptical of kneejerk projections of doom, whether from activists, competition scholars, or media pundits.”

The Atlantic – ICLE Academic Affiliate Bernard Black was quoted by The Atlantic in a story about the lingering risks of COVID-19 for older Americans. You can read full piece here.

“There is substantial risk, even if you’ve gotten all the vaccines,” Bernard Black, a law professor at Northwestern University who studies health policy, told me.

… A study recently published in the journal Vaccines showed that for vaccinated adults ages 60 and over, the risk of dying from COVID versus other natural causes jumped from 11 percent to 34 percent within a year of completing their primary shot series. A booster dose brings the risk back down, but other research shows that it wears off too. A booster is a basic precaution, but “not one that everyone is taking,” Black, a co-author of the study, told me.

…”One way to think about it is that this is a new risk that’s out there” alongside other natural causes of death, such as diabetes and heart failure, Black said. But it’s a risk older Americans can’t ignore, especially as the country has dropped all COVID precautions. Since Christmas Eve, I have felt uneasy about how readily I normalized putting so little effort into protecting my nonagenarian loved ones, despite knowing what might happen if they got sick. For older people, who must contend with the peril of attending similar gatherings, “there’s sort of no good choice,” Black said. “The world has changed.”

CNS News – ICLE Academic Affiliate Stan Liebowitz was cited by CNS News in a story about the role that teachers union played in school lockdowns during the COVID-19 pandemic. You can read full piece here.

As a landmark 2018 paper coauthored by economists Stan Liebowitz and Matthew Kelly (the latter was a research fellow at the time) found, union legal privileges, political clout, and other closely related factors have a “substantial and statistically negative relationship with student achievement.”

Law360 – ICLE Director of Competition Policy Dirk Auer was quoted by Law360 in a story about ICLE’s white paper on “doomsday mergers.” You can read full piece here.

“When we hear critics saying this merger is going to be disastrous and antitrust is not up to the task, that just doesn’t pan out,” Auer told Law360 in an interview.

The paper puts ICLE in the middle of the policy debate between defenders of traditional merger review rooted in how deals will affect consumer prices and advocates of a more expansive and aggressive approach often described as neo-Brandeisians. In addressing the last two mergers, the paper also speaks to current enforcement actions.

BeInCrypto – ICLE Academic Affiliate Thibault Schrepel was quoted by BeInCrypto in a story about passage of the EU’s Data Act. You can read full piece here.

The EU “kill switch” presents a challenge to this fundamental immutability, which many experts have found concerning. Thibault Schrepel, Associate Professor of Law and Technology at VU Amsterdam University, believes this has the potential to undermine the technology itself. “Article 30, as currently drafted, goes a step too far in addressing the issues raised by immutability,” he said in a March 14 tweet.

“Instead of enacting ‘practical immutability’ (where immutability remains the principle and alterability the exception), it makes alterability the principle. In doing so, it endangers smart contracts to an extent that no one can predict,” Schrepel continued. He also shared concerns that the definition (“smart contracts for data sharing”) used in the Article was not specific enough.

PORTLAND, Ore. (March 22, 2023) – As the Federal Trade Commission (FTC) and the U.S. Justice Department’s (DOJ) Antitrust Division prepare to release updated federal merger guidelines that the agencies say will better detect and prevent illegal and anticompetitive deals, a new research paper from the International Center for Law & Economics (ICLE) looks back at several recent high-profile mergers that drew apocalyptic warnings about potential harm to competition and consumers. 

Authors Brian C. Albrecht, Dirk Auer, Eric Fruits, and Geoffrey A. Manne note that a retrospective look at these past mergers finds that the critics—some of whom have since taken positions in the upper echelons of U.S. antitrust agencies—were frequently off-base in their dire predictions. For example:

• Amazon’s 2017 deal to purchase Whole Foods would, we were told, allow the company to dominate the grocery business, much as it had online retail. Lina Khan, now chair of the FTC, even warned that it “would allow Amazon to potentially thwart future innovations.” Five years after the deal, the stocks of many rival retail companies significantly outperformed Amazon’s, while Whole Foods’ market share has not meaningfully increased since its acquisition by Amazon.
• ABI’s 2016 deal to acquire SABMiller would, we were told, “eliminate competition” in the brewing industry and that “the effects on the craft-brewing industry would be devastating.” In fact, in the four years following the merger, the average U.S. market saw an 11% increase in the number of craft brewers, and the market concentration enjoyed by the four largest breweries has seen a long-term drop from 90.8% to 68.6%.
• Bayer’s 2018 merger with Monsanto would, Sen. Amy Klobuchar (D-Minn.) warned at the time, “significantly reduce competition, limit seed options for farmers, and raise prices for both farmers and consumers.” In fact, corn and soybean prices actually fell in real inflation-adjusted terms. And rather than enjoying monopoly profits, Bayer’s stock is down more than 50% over the past five years.
• Google’s 2019 purchase of Fitbit raised the hackles of both consumer privacy and antitrust advocates, with seven Democratic senators warning that adding “Fitbit’s consumer data to Google’s could further diminish the ability of companies to compete with Google in… ad technology markets.” In fact, Google’s share of online advertising spending has declined from 34.7% to 28.8%. Moreover, Fitbit’s share of the smartwatch market has actually fallen from 5.7% to 3.8%. And contrary to warnings from privacy advocates, Google does not use Fitbit data to target Google Ads.

The authors also examine a pair of deals that have drawn significantly more interest in recent years than they did at the time they were consummated.

• Facebook’s 2012 deal to purchase Instagram was largely ignored as insignificant at the time, or even derided as a poor business decision on Facebook’s part. In more recent years, it has been described as a “killer acquisition” that locked in Meta’s social-media monopoly, making it “the one that got away” from antitrust regulators. But, in fact, Meta’s stock has lost more than half its value since its peak in 2021, as the company has had to contend with the rise of TikTok. 
• Ticketmaster’s 2010 merger with Live Nation has come under increased scrutiny in the wake of the company’s technical difficulties in rolling out sales for Taylor Swift’s 2023 tour. While the merger did draw objections at the time, the reality is that Ticketmaster has actually lost market share in the years since, partly due to the structural remedies it agreed to as part of the deal. Moreover, the technical problems it encountered in the Taylor Swift fiasco don’t appear to be related in any way to the Live Nation merger. 

“Most mergers, even the ones we picked as noteworthy, are largely benign but pose a set of tradeoffs,” the authors write. “These ambiguous effects are precisely why evidence-based antitrust enforcement—along with remedies that can separate the wheat from the chaff—is as important today as it has ever been.”

The full paper can be downloaded here. To schedule an interview with the authors, contact Elizabeth Lincicome at [email protected] or (919) 744-8087.