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Showing 9 of 49 Publications by Null Author, Dirk Auer

Merger Control’s Misaligned Incentives

TOTM Antitrust policymakers around the world have taken a page out of the Silicon Valley playbook and decided to “move fast and break things.” While the . . .

Antitrust policymakers around the world have taken a page out of the Silicon Valley playbook and decided to “move fast and break things.” While the slogan is certainly catchy, applying it to the policymaking world is unfortunate and, ultimately, threatens to harm consumers.

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Antitrust & Consumer Protection

Case closed: Google wins (for now)

TOTM The European Commission and its supporters were quick to claim victory following last week’s long-awaited General Court of the European Union ruling in the Google Shopping case. . . .

The European Commission and its supporters were quick to claim victory following last week’s long-awaited General Court of the European Union ruling in the Google Shopping case. It’s hard to fault them. The judgment is ostensibly an unmitigated win for the Commission, with the court upholding nearly every aspect of its decision.

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Antitrust & Consumer Protection

The Contestable Platform Paradox

TOTM Why do digital industries routinely lead to one company having a very large share of the market (at least if one defines markets narrowly)? To . . .

Why do digital industries routinely lead to one company having a very large share of the market (at least if one defines markets narrowly)? To anyone familiar with competition policy discussions, the answer might seem obvious: network effects, scale-related economies, and other barriers to entry lead to winner-take-all dynamics in platform industries. Accordingly, it is that believed the first platform to successfully unlock a given online market enjoys a determining first-mover advantage.

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Antitrust & Consumer Protection

Big Tech and the Dystopian Fears Undermining Sound Policy

Popular Media Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) have just unveiled their long-awaited draft American Innovation and Choice Online Act. If passed into law, the . . .

Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) have just unveiled their long-awaited draft American Innovation and Choice Online Act. If passed into law, the bill would effectively outlaw a wide array of common tech industry practices in which platforms favor their own products. This despite scant evidence that such practices are detrimental to consumers, that they prevent rivals from entering online markets, or that they harm innovation.

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Antitrust & Consumer Protection

Why There Needs to Be More, not Less, Consolidation in Video Streaming

TOTM Recent commentary on the proposed merger between WarnerMedia and Discovery, as well as Amazon’s acquisition of MGM, often has included the suggestion that the online content-creation and . . .

Recent commentary on the proposed merger between WarnerMedia and Discovery, as well as Amazon’s acquisition of MGM, often has included the suggestion that the online content-creation and video-streaming markets are excessively consolidated, or that they will become so absent regulatory intervention. For example, in a recent letter to the U.S. Justice Department (DOJ), the American Antitrust Institute and Public Knowledge opine that…

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Antitrust & Consumer Protection

Dystopia vs. Evidence-Based Policymaking

TL;DR All around the world, policymakers are proposing legislative changes that would drastically alter the ways that online platforms can operate.

Background…

All around the world, policymakers are proposing legislative changes that would drastically alter the ways that online platforms can operate. Motivating these initiatives have been fears that, absent explicit regulation, digital markets would suffer from failures that could not later be remediated.

But…

These putative reforms are not rooted in a rigorous assessment of the costs and benefits of regulatory intervention. In lieu of empirical evidence, lawmakers are relying on highly abstracted theories of potential harm whose bearing on real-world markets is uncertain. Policymakers should instead rely on the tried-and-tested Consumer Welfare Standard that has successfully guided U.S. antitrust enforcement for the better part of a century.

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Antitrust & Consumer Protection

The Virtues and Pitfalls of Economic Models

TOTM Interrogations concerning the role that economic theory should play in policy decisions are nothing new. Milton Friedman famously drew a distinction between “positive” and “normative” . . .

Interrogations concerning the role that economic theory should play in policy decisions are nothing new. Milton Friedman famously drew a distinction between “positive” and “normative” economics, notably arguing that theoretical models were valuable, despite their unrealistic assumptions. Kenneth Arrow and Gerard Debreu’s highly theoretical work on General Equilibrium Theory is widely acknowledged as one of the most important achievements of modern economics.

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Antitrust & Consumer Protection

Dirk Auer on the digital economy

Presentations & Interviews ICLE Senior Fellow of Law & Economics Dirk Auer joined the Institute for Internet & the Just Society’s Just Talking series for a discussion of . . .

ICLE Senior Fellow of Law & Economics Dirk Auer joined the Institute for Internet & the Just Society’s Just Talking series for a discussion of competition policy and the digital economy. Video of the full event is embedded below.

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Antitrust & Consumer Protection

Apple v Epic: The Value of Closed Systems

TL;DR Background… Apple Inc. and Epic Games are currently locked in a high-stakes antitrust dispute. Epic is challenging Apple’s rules that require apps to use Apple . . .

Background…

Apple Inc. and Epic Games are currently locked in a high-stakes antitrust dispute. Epic is challenging Apple’s rules that require apps to use Apple Pay for in-app purchases and that ban alternative app stores from iOS devices like iPhones and iPads. 

The suit is part Epic’s broader strategy, dubbed Project Liberty, to pay lower fees to online platforms. If it succeeds, Epic would be able to steer its users toward lower-priced payment processors. This would increase the competitive constraints that Apple faces when it sets platform fees.

But…

Epic’s proposals would allow large developers and rival payment processors to get the benefit of Apple’s investments in iOS and the App Store without paying for them. It could also undermine other online platforms that rely on commissions to earn a positive return on their upfront investments. This could shrink investments in platform creation and upkeep, hurting users and leading to worse platforms overall.

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Antitrust & Consumer Protection