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TL;DR Some U.S. lawmakers have pointed the finger at rising concentration and alleged anticompetitive behavior by both suppliers (e.g., meat packers; oil & gas companies) and retailers (e.g., groceries; online retailers) as the cause of recent, sharp increases in consumer prices.
Some U.S. lawmakers have pointed the finger at rising concentration and alleged anticompetitive behavior by both suppliers (e.g., meat packers; oil & gas companies) and retailers (e.g., groceries; online retailers) as the cause of recent, sharp increases in consumer prices. They propose vigorous antitrust enforcement as a tool to stop the scourge of rising prices.
While consumer prices have increased sharply in just the past year, concentration numbers in the relevant markets have been relatively unchanged for years or even decades. The best case that can be mustered is that existing market structures may slightly exacerbate short-term price dislocations whose ultimate cause is exogenous supply and demand shocks brought about by the COVID-19 pandemic and government responses to it.
The purpose of antitrust law is to protect competition, not to guarantee low prices in and of themselves. High or rising prices are not an antitrust violation, as they may be the result of the undistorted competition that antitrust ultimately protects, and the price system is the most effective means of resource allocation, even when the process itself is painful. There are a host of reasons to expect higher prices in the current environment, but virtually none of the evidence points to anticompetitive conduct as one of them.
Read the full explainer here.
Popular Media COVID-19 disrupted — and may continue to disrupt — in-person learning at many public schools across the country. For many high schoolers, this has led . . .
COVID-19 disrupted — and may continue to disrupt — in-person learning at many public schools across the country. For many high schoolers, this has led to reduced academic achievement and a decline in mental health. As schools transitioned to online and hybrid teaching, many states and local districts lowered graduation requirements, causing students, colleges, and employers to question the value of a high school diploma.
Read the full piece here.
Regulatory Comments Comments of the International Center for Law & Economics Before the Surface Transportation Board STB Ex Parte No. 711 (Sub-No. 1) Reciprocal Switching Submitted Feb. . . .
On behalf of the International Center for Law & Economics, a nonpartisan nonprofit that promotes the use of law & economics methodologies to inform public-policy debates, I offer the following comments to express concern about the potential finalization and promulgation of the Surface Transportation Board’s (STB) 2016 Notice of Proposed Rulemaking (NPRM) regarding the imposition of a reciprocal-switching requirement for U.S. freight-rail operations.
The STB’s renewed efforts on reciprocal switching have come as part of a push by the administration to spur competition in the U.S. economy.[1] This proceeding responds specifically to a call by President Joe Biden to: “strengthen regulations pertaining to reciprocal switching agreements.”[2] Unfortunately, like much of the administration’s broader effort, the regulatory solutions the STB offers are in search of competition problems, evidence of which remains conspicuously absent. Worse, the STB offers these new regulations on the basis of a docket that is now dated and that itself relied on even older data.[3] As a procedural and factual matter, the STB should use this proceeding to abandon consideration both of the 2016 NPRM, specifically, and of a reciprocal-switching mandate altogether.
Toward that end, these comments speak to the manifest infirmities of the proposal under consideration by examining how the STB has failed in its statutory duty to identify a problem suitable for regulatory redress; by identifying the proposed solution’s most likely outcomes and exploring how poorly they satisfy the Proposed Rule’s stated goal; and by detailing the inevitable costs associated with promulgating the Proposed Rule.
Competition within the freight-rail sector and the larger U.S. economy is vital to the nation’s economic health, and by the STB’s most recent assessment, is robust.[4] But the role of regulation is to make markets regular in a manner that fosters efficiency, not to reflect the whims or will of a regulator to the detriment of a disfavored party.
Read the full comments here.
[1] Executive Order 14036, 86 FR 36987-36999, “Promoting Competition in the American Economy.” July 9, 2021. https://www.federalregister.gov/d/2021-15069.
[2] Ibid.
[3] Docket No. EP 711, Docket No. EP 711 (Sub-No. 1), 81 FR 51149-51165,“Petition for Rulemaking To Adopt Revised Competitive Switching Rules; Reciprocal Switching.” Aug 3, 2016. (NPRM). https://www.federalregister.gov/d/2016-17980.
[4] Laurits Christensen Associates report to Surface Transportation Board, “A Study of Competition in the U.S. Freight Railroad Industry and Analysis of Proposals that might Enhance Competition.” November 2009. https://www.stb.gov/wpcontent/uploads/files/docs/competitionStudy/Executive%20Summary.pdf.
Popular Media With inflation at a 40-year high, the blame game is on. Sen. Elizabeth Warren (D-Mass.) has blamed rising prices on price-gouging or “plain-old corporate greed.” The Federal Trade Commission . . .
With inflation at a 40-year high, the blame game is on. Sen. Elizabeth Warren (D-Mass.) has blamed rising prices on price-gouging or “plain-old corporate greed.” The Federal Trade Commission (FTC), led by progressive Lina Khan, is launching an investigation into whether high prices stem from unscrupulous business practices.
ICLE Issue Brief State legislatures are now tackling consumers’ digital privacy. Given the Internet’s inherently international character, a federal bill setting a national standard for digital privacy would . . .
State legislatures are now tackling consumers’ digital privacy. Given the Internet’s inherently international character, a federal bill setting a national standard for digital privacy would be ideal. Yet, in the absence of federal legislation, state governments are seeking to address consumer privacy. Unfortunately, overly broad and burdensome regulatory obligations pose a real and immediate risk to digital innovation. Ensuring a globally robust market requires balancing consumer privacy and legitimate information exchange between consumers and digital-services companies.
The attached guiding principles and legislative checklist from the Reason Foundation and the International Center for Law & Economics seeks to help legislators and stakeholders narrowly tailor state consumer-privacy policy to address concrete consumer harms while preventing disproportionately punitive responses that obstruct market performance.
Read the full checklist here.
Popular Media In their zeal to curb big tech through the Digital Markets Act, the European legislators are risking the privacy and security of all Europeans. It . . .
In their zeal to curb big tech through the Digital Markets Act, the European legislators are risking the privacy and security of all Europeans. It is time to accept the reality that the measures meant to force big platforms to be more open, will force them to lower their defences and to open the data of Europeans to bad actors. No amount of wishful thinking will change the fact that forced openness is in a tug of war with security. The DMA’s privacy and security provisions do not come close to taking the problem seriously and unreasonably expect the tech companies to solve a new class of risks that the DMA will create.
TOTM During the exceptional rise in stock-market valuations from March 2020 to January 2022, both equity investors and antitrust regulators have implicitly agreed that so-called “Big . . .
During the exceptional rise in stock-market valuations from March 2020 to January 2022, both equity investors and antitrust regulators have implicitly agreed that so-called “Big Tech” firms enjoyed unbeatable competitive advantages as gatekeepers with largely unmitigated power over the digital ecosystem.
TL;DR While Congress is considering legislation that would dictate the terms that major app stores can offer to app developers, several states have similarly pursued legislation to regulate app stores.
While Congress is considering legislation that would dictate the terms that major app stores can offer to app developers, several states have similarly pursued legislation to regulate app stores. In particular, bills requiring app-store providers to permit the practice of “sideloading,” or prohibiting them from requiring that specific payment mechanisms be used, have gained traction in several states. Some state bills also would create a private right of action against app stores.
A proliferation of state regulations threatens to create a patchwork of rules for mobile app stores, which operate globally. In this landscape, it is likely that one or two large states could set the regulatory baseline for the entire country. Smaller states that set burdensome rules could force app stores to cease distributing apps from developers domiciled in their jurisdictions.
These bills are ill-advised on their own terms. Mandating that closed app-store platforms permit the use of alternative payment options could see large developers and rival payment processors free ride on an app store’s own investments. Denying closed platforms the ability to prohibit “sideloading” could compromise cybersecurity. These state bills would substitute regulatory fiat for consumer choice, sacrificing the benefits currently enjoyed by many consumers.
Scholarship Abstract The applicability of the notion of killer acquisition to digital platforms has long been debated. The case of the proceedings brought by the U.S. . . .
The applicability of the notion of killer acquisition to digital platforms has long been debated. The case of the proceedings brought by the U.S. Department of Justice against Visa in November 2020 (before their joint dismissal in January 2021) is even more interesting insofar as it makes it possible to illustrate and discuss its different facets ranging from the notion of competition suppression to that of consolidation and extension of the dominant position. Even if the acquisition project was eventually withdrawn, the complaint analysis also makes it possible to question inter-digital ecosystem competition and shed light on the issues related to monitoring acquisitions undertaken by dominant companies.
