Research Programs
More
What are you looking for?
Showing 9 of 274 Results in Monopolization
TOTM In a policy speech earlier this year, Commissioner J. Thomas Rosch of the Federal Trade Commission advocating the incorporation of behavioral economics into antitrust analysis . . .
In a policy speech earlier this year, Commissioner J. Thomas Rosch of the Federal Trade Commission advocating the incorporation of behavioral economics into antitrust analysis suggested one concern that others might have with the approach was that “behavioral economics was simply liberalism masquerading as economic thinking.” The Commissioner himself has been a vocal proponent of incorporating insights from behavioral economics into antitrust, as has already been done in the consumer protection realm (see, e.g. CFPB). Indeed, with Cass Sunstein’s appointment at OIRA, the recent creation of a “Nudge” team in David Cameron’s Cabinet (aka “behavioral insight team”) in the UK, the CFPB, and the calls from at least one Federal Trade Commissioner to modify antitrust analysis suggest the behavioral regulatory regime is no longer right around the corner; it has arrived.
Read the full piece here.
Scholarship Abstract Antitrust is back in vogue at the U.S. Supreme Court. Whereas the Rehnquist Court decided few antitrust cases in its latter years (only one . . .
Antitrust is back in vogue at the U.S. Supreme Court. Whereas the Rehnquist Court decided few antitrust cases in its latter years (only one from 1993 to 1995, one each year from 1996 through 1999, and none from 2000 to 2003), the Roberts Court issued seven antitrust decisions in its first two years alone. Numerous commentators have characterized the Roberts Court’s antitrust decisions as radical departures that betray a pro-business, anti-consumer bias. While some of the decisions do represent significant changes from past practice (see, e.g., Leegin, which overruled the 1911 Dr. Miles rule of per se illegality for minimum resale price maintenance, and Twombly, which abrogated the infamous “no set of facts” pleading standard set forth in the 1957 Conley v. Gibson decision), the “pro-business/anti-consumer” characterization of the Roberts Court’s antitrust decisions is inaccurate. The characterization – caricature, really – fails to appreciate the fundamental limits of antitrust, a body of law that requires judges and juries to make fine distinctions between procompetitive and anticompetitive behaviors that frequently resemble each other. While false acquittals of anticompetitive conduct may harm consumers, so may false convictions of procompetitive actions. And efforts to eliminate errors in liability judgments are themselves costly. Optimal antitrust rules will therefore aim to minimize the sum of decision costs (the costs of reaching a liability decision) and expected error costs (the social losses from false convictions and false acquittals). Each of the Roberts Court’s antitrust decisions can be defended in light of this “decision-theoretic” approach, an approach calculated to maximize the effectiveness of the antitrust enterprise, to the ultimate benefit of consumers. This Article first describes the fundamental limits of antitrust and the decision-theoretic approach such limits inspire. It then analyzes the Roberts Court’s antitrust decisions, explaining how each coheres with the decision-theoretic model. Finally, it predicts how the Court will address three issues likely to come before it in the future: tying, loyalty rebates, and bundled discounts.
TOTM The WSJ recently published the next installment of the Microsoft-Google antitrust wars. A Google representative argues “competition is one click away”; Charles (“Rick”) Rule, Microsoft’s . . .
The WSJ recently published the next installment of the Microsoft-Google antitrust wars. A Google representative argues “competition is one click away”; Charles (“Rick”) Rule, Microsoft’s antitrust attorney, argues that Google’s conduct might harm competition. Rule’s main point is summed up in the first line of his piece: “what goes around comes around.” The longer version of the argument is as follows: (1) Microsoft was faced with antitrust allegations instigated by rivals that its business practices harmed competition; (2) Microsoft defended on various grounds, including that there was ample competition in high-tech markets; (3) Microsoft lost and new law was made; (4) Google is now faced with similar allegations, brought on and/or instigated by similar rivals (including Microsoft), and involving similar defenses; (5) fair play and consistency dictates that the same standard be applied to Microsoft and Google; (6) thus, Google is an antitrust problem and should lose a suit brought against it. I will refer to (1)-(6) as the “antitrust karma” argument.
TOTM How should an economist interpret the fact that Microsoft appears to be “behind” recent enforcement actions against Google in the United States and, especially, in . . .
How should an economist interpret the fact that Microsoft appears to be “behind” recent enforcement actions against Google in the United States and, especially, in Europe?
“With skepticism!” Is the answer I suspect many readers will offer upon first glance. There is a long public choice literature, and long history in antitrust itself, that suggests that one should be weary of private enforcement of the antitrust laws against rivals both in the form of litigation and attempts to delegate the enforcement effort (and costs) to the government.
TOTM One of the first reactions I had when reading the settlement is that it is quite striking how much and at what level of detail . . .
One of the first reactions I had when reading the settlement is that it is quite striking how much and at what level of detail the settlement micro-manages Intel’s business decisions. Lets consider a just a handful of provisions and look at the language in the settlement. Again, I think these provisions should be read with the benefit of some perspective in market performance during the relevant time period.
TOTM Let me add on a few brief observations on the Intel settlement to Dan’s earlier comments, with which I largely agree. There is a lot . . .
Let me add on a few brief observations on the Intel settlement to Dan’s earlier comments, with which I largely agree. There is a lot to say about the settlement: the predatory design aspects, Section 5, the (I found) quite odd self-congratulatory settlement press conference and webcast, and of course, what the settlement means for consumers. I’m very interested in all of these issues, but perhaps none is more important than the last. We cannot simply assume that the settlement equates to a victory for consumers. Readers of this blog will be very familiar with the argument that merely counting cases, or agency activity, and of course settlements, are not reliable measures of the quality of agency performance or meaningful from a consumer welfare perspective. But problems with this case make that warning especially appropriate here. Thus, before delving into some first reactions based on language in the settlement over the days and maybe weeks to come, some perspective is in order.
TOTM Connecticut AG Richard Blumenthal has reportedly contacted Apple and Amazon concerning their pricing arrangements with publishers (WSJ, CNN): Mr. Blumenthal said he has sent letters . . .
Connecticut AG Richard Blumenthal has reportedly contacted Apple and Amazon concerning their pricing arrangements with publishers (WSJ, CNN):
Mr. Blumenthal said he has sent letters to Amazon and Apple asking them to “meet with his office” to address his concerns that agreements in place may restrict rivals from offering cheaper e-books. For instance, he said, “both Amazon and Apple have reached agreements with the largest e-book publishers that ensure both will receive the best prices for e-books over any competitors.”
A “most favored nation” (MFN) clause is a contractual agreement between a supplier and a customer that requires the supplier to sell to the customer on pricing terms at least as favorable as the pricing terms on which that supplier sells to other customers.
TOTM Dan Crane’s post on the DOJ’s antitrust activity, and in particular, monopolization enforcement, during the Obama administration notes the dissonance between rhetoric and reality. I . . .
Dan Crane’s post on the DOJ’s antitrust activity, and in particular, monopolization enforcement, during the Obama administration notes the dissonance between rhetoric and reality. I thought I’d post the following data from the DOJ website concerning Section 2 investigations initiated and cases won over the last 40 years for some perspective.
ICLE White Paper Abstract The Federal Trade Commission’s recent complaint targets the Intel Corporation for antitrust scrutiny under Section 5 of the Federal Trade Commission Act and Section . . .
The Federal Trade Commission’s recent complaint targets the Intel Corporation for antitrust scrutiny under Section 5 of the Federal Trade Commission Act and Section 2 of the Sherman Act. The Commission alleges that, through the use of loyalty discounts offered to microprocessor purchasers, Intel unlawfully excluded rivals and harmed consumers in the microprocessor and graphics processor markets. This article analyzes the Commission’s claims. The Commission’s reliance on Section 5 should be viewed with suspicion because it allows the Commission to evade the more stringent standards of proof that have been emerged in the Supreme Court’s Section 2 jurisprudence. Furthermore, the Commission’s actions surrounding its prosecution of Intel reflect an adversarial attitude that undermines the Commission’s stated comparative advantages over private litigants. Moreover, the Commission’s allegations form a weak case when evaluated under the conventional Section 2 standard. Unlike many Section 2 cases alleging speculative future consumer harm, the disputed conduct in this case has been in the marketplace for nearly a decade, and its competitive footprint is readily observable. The available data do not support the Commission’s theory that Intel’s behavior harmed consumers. To the contrary, it is almost certain that Intel’s distribution contracts led to tangible, demonstrable consumer welfare gains in the form of lower prices. Accordingly, the Commission’s complaint against Intel threatens to harm consumers directly in the computer industry as well as indirectly by undermining the stability and certainly which longstanding Section 2 jurisprudence has afforded the business community by requiring the plaintiffs offer rigorous proof of competitive harm.