What are you looking for?

Showing 9 of 36 Publications by Null Author, Eric Fruits

Eric Fruits on Tax Day

Presentations & Interviews ICLE Chief Economist Eric Fruits joined a discussion on KGW News in Portland, Oregon, about 2021’s delayed Tax Day, where state and federal taxes go, . . .

ICLE Chief Economist Eric Fruits joined a discussion on KGW News in Portland, Oregon, about 2021’s delayed Tax Day, where state and federal taxes go, and how Oregonians feel about taxes. The full video is embedded below.

Continue reading

One Window Shuts, Another Opens – Why Warner Bros. Streamed

Popular Media Warner Bros. Entertainment Inc.’s announcement in early December that it would send 17 films from its 2021 slate directly to its HBO Max streaming service . . .

Warner Bros. Entertainment Inc.’s announcement in early December that it would send 17 films from its 2021 slate directly to its HBO Max streaming service the same day they debut in theaters shocked the entertainment world. Affected films include anticipated franchise tentpoles like “The Matrix 4,” “Dune” and “Space Jam: A New Legacy.”

Theaters traditionally have had a three-month exclusive “window” to run a film, after which it would be distributed to home video, premium channels, free channels, and then network television. Warner effectively shut the window between when a film is shown in theaters and when it is made available elsewhere.

Read the full piece here.

Continue reading
Intellectual Property & Licensing

The Case Against Google Advertising: What’s the Relevant Market and How Many Are There?

TOTM Texas Attorney General Ken Paxton’s complaint against Google’s advertising business, joined by the attorneys general of nine other states, continues a long tradition of narrowing market definition to shoehorn market dominance where it may not exist.

U.S. antitrust regulators have a history of narrowly defining relevant markets—often to the point of absurdity—in order to create market power out of thin air. The Federal Trade Commission (FTC) famously declared that Whole Foods and Wild Oats operated in the “premium natural and organic supermarkets market”—a narrowly defined market designed to exclude other supermarkets carrying premium natural and organic foods, such as Walmart and Kroger. Similarly, for the Staples-Office Depot merger, the FTC narrowly defined the relevant market as “office superstore” chains, which excluded general merchandisers such as Walmart, K-Mart and Target, who at the time accounted for 80% of office supply sales.

Read the full piece here.

Continue reading
Antitrust & Consumer Protection

Rolled by Rewheel, Redux

TOTM The Finnish consultancy Rewheel periodically issues reports using mobile wireless pricing information to make claims about which countries’ markets are competitive and which are not. . . .

The Finnish consultancy Rewheel periodically issues reports using mobile wireless pricing information to make claims about which countries’ markets are competitive and which are not. For example, Rewheel claims Canada and Greece have the “least competitive monthly prices” while the United Kingdom and Finland have the most competitive.

Read the full piece here.

Continue reading
Telecommunications & Regulated Utilities

Private Antitrust: What Hipsters Can Learn from Hulk Hogan

TOTM The antitrust populist ranks are chock-a-block with economists, policy wonks, and go-getter attorneys. If they are so confident in their claims of rising concentration, bad behavior, and harm to consumers, suppliers, and workers, then they should put those ideas to the test with some slam dunk litigation.

Antitrust populists have a long list of complaints about competition policy, including: laws aren’t broad enough or tough enough, enforcers are lax, and judges tend to favor defendants over plaintiffs or government agencies. The populist push got a bump with the New York Times coverage of Lina Khan’s “Amazon’s Antitrust Paradox” in which she advocated breaking up Amazon and applying public utility regulation to platforms. Khan’s ideas were picked up by Sen. Elizabeth Warren, who has a plan for similar public utility regulation and promised to unwind earlier acquisitions by Amazon (Whole Foods and Zappos), Facebook (WhatsApp and Instagram), and Google (Waze, Nest, and DoubleClick).

Read the full piece here.

Continue reading
Antitrust & Consumer Protection

The Antitrust Risks of Four to Three Mergers: Heightened Scrutiny of a Potential ThyssenKrupp/Kone Merger

ICLE Issue Brief Read ICLE's study by Eric Fruits and Geoffrey A. Manne, "The Antitrust Risks of Four To Three Mergers: Heightened Scrutiny of a Potential ThyssenKrupp/Kone Merger."

This study examines the heightened scrutiny of four to three mergers by competition authorities in the current regulatory environment, using the potential merger of two of the world’s largest elevator and escalator businesses — Germany’s ThyssenKrupp and Finland’s Kone — as a case study.

In recent years, regulators have become more aggressive in merger enforcement in response to populist criticisms that lax merger enforcement has led to the rise of anticompetitive “big business.”  In this environment, it is easy to imagine regulators intensely scrutinizing and challenging or conditioning virtually any merger that substantially increases concentration.

The next opportunity for antitrust authorities to dispel criticism by flexing their muscles in a four to three merger review may be just around the corner. It is widely reported that ThyssenKrupp is contemplating the sale of its elevator business, with Kone as a potential buyer. This potential deal provides an opportunity to highlight the likely challenges, complexity, and cost that regulatory scrutiny of such mergers actually entails — and it is likely to be a far cry from the lax review and permissive decisionmaking of antitrust critics’ imagining.

In the case of a potential ThyssenKrupp/Kone merger, the combined entity would face lengthy, costly, and duplicative review in multiple jurisdictions, any one of which could effectively block the merger or impose onerous conditions. It would face the automatic assumption of excessive concentration in several of these, including the US, EU, and Canada. In the US, the deal would also face heightened scrutiny based on political considerations, including the perception that the deal would strengthen a foreign firm at the expense of a domestic supplier. It would also face the risk of politicized litigation from state attorneys general, and potentially the threat of extractive litigation by competitors and customers.

Whether the merger would actually entail anticompetitive risk may, unfortunately, be of only secondary importance in determining the likelihood and extent of a merger challenge or the imposition of onerous conditions.

 

Continue reading
Antitrust & Consumer Protection

On the Antitrust Risks of Four to Three Mergers: A Case Study of a Potential ThyssenKrupp/Kone Merger

TOTM In anticipation of the long-rumored and much-discussed sale of ThyssenKrupp’s elevator business — the International Center for Law & Economics released "The Antitrust Risks of Four To Three Mergers: Heightened Scrutiny of a Potential ThyssenKrupp/Kone Merger," by Eric Fruits and Geoffrey A. Manne.

Today, Reuters reports that Germany-based ThyssenKrupp has received bids from three bidding groups for a majority stake in the firm’s elevator business. Finland’s Kone teamed with private equity firm CVC to bid on the company. Private equity firms Blackstone and Carlyle joined with the Canada Pension Plan Investment Board to submit a bid. A third bid came from Advent, Cinven, and the Abu Dhabi Investment Authority.

Read the full piece here.

Continue reading
Antitrust & Consumer Protection

Rising Concentration, Rising Prices: Not So Fast

TOTM Wall Street Journal commentator, Greg Ip, reviews Thomas Philippon’s forthcoming book, "The Great Reversal: How America Gave Up On Free Markets." Ip describes a “growing mountain” of research on industry concentration in the U.S. and reports that Philippon concludes competition has declined over time, harming U.S. consumers.

Wall Street Journal commentator, Greg Ip, reviews Thomas Philippon’s forthcoming book, The Great Reversal: How America Gave Up On Free Markets. Ip describes a “growing mountain” of research on industry concentration in the U.S. and reports that Philippon concludes competition has declined over time, harming U.S. consumers.

Read the full piece here.

Continue reading
Antitrust & Consumer Protection

Comments of ICLE, re: Tunney Act Review of the Sprint-T-Mobile Merger

Written Testimonies & Filings ICLE filed a letter summarizing its analysis of the relevant empirical literature on mobile carrier mergers as part of the Tunney Act review process.

The central question of a merger review is the likely effect that the transaction will have on consumers. The DOJ’s complaint against the Sprint-T-Mobile merger is built upon the allegation that the proposed transaction represents a reduction from four to three national facilities-based mobile network operators (a so-called “4-to-3 merger”), and that such a transaction would reduce competition and result in “higher prices, reduced innovation, reduced quality and fewer choices” in the marketplace. This is an empirical question that has been studied by numerous scholars in recent years.

The upshot of the empirical literature is that, in fact, such mergers appear to increase, not decrease, innovation. Moreover, the research is, at best, inconclusive with respect to the price effects of such mergers. Based on these findings, we believe that the DOJ was correct to approve the transaction, and that this is so regardless of the expected competitive effects of the Final Judgment’s Divestiture Package, which is likely unnecessary to ensure that the market remains competitive.

ICLE filed a letter summarizing its analysis of the relevant empirical literature on mobile carrier mergers as part of the Tunney Act review process.

The letter and attached analysis can be read here. 

Continue reading
Antitrust & Consumer Protection