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In defence of the Supreme Court’s ‘single market’ definition in Ohio v American Express

Scholarship In this article, Geoffrey Manne evaluates the Supreme Court’s approach, discusses the economic and legal underpinnings of how it approached market definition and effects analysis, and demonstrates why the primary criticisms of the Court’s Ohio v American Express decision are misguided.

Summary

In his commentary, Geoffrey A. Manne supports the Supreme Court’s decision, and offers insightful analysis of why, to his mind, the decision properly identifies the competitive process of platforms.

Tim Wu’s critique, on the other hand, raises concerns as to the treatment of evidence and theory in this case and the legacy of the ruling, which may undermine the efficacy of future antitrust enforcement.

The Supreme Court’s decision in Ohio, et al v Am Express Co, et al (‘Amex’) is uniquely important for the antitrust analysis of firms in the modern platform economy. Although it is undoubtedly not the last word on the subject, the case represents the Court’s first comprehensive effort to address the thorny and previously indeterminate question of how courts should define the relevant market and assess competitive effects in antitrust cases involving two-sided or multi-sided platforms (‘two-sided markets’). In this article, I evaluate the Supreme Court’s approach to this question, discuss the economic and legal underpinnings of how it approached market definition and effects analysis, and demonstrate why the primary criticisms of the Court’s decision are misguided. While the Court’s approach has been roundly decried by some, its conclusion—that both sides of a two-sided market must be considered in defining the relevant market and evaluating the existence and consequences of a firm’s exercise of market power—is, indeed, the proper one.

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Antitrust & Consumer Protection

IMG-Learfield: An antitrust reality check on two-sided market mergers

TOTM Yesterday Learfield and IMG College inked their recently announced merger. Since the negotiations were made public several weeks ago, the deal has garnered some wild speculation and potentially negative attention. Now that . . .

Yesterday Learfield and IMG College inked their recently announced merger. Since the negotiations were made public several weeks ago, the deal has garnered some wild speculation and potentially negative attention. Now that the merger has been announced, it’s bound to attract even more attention and conjecture.

Read the full piece here.

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Antitrust & Consumer Protection

The Washington Post editorial board understands online competition better than the European Commission does

TOTM Last week the editorial board of the Washington Post penned an excellent editorial responding to the European Commission’s announcement of its decision in its Google . . .

Last week the editorial board of the Washington Post penned an excellent editorial responding to the European Commission’s announcement of its decision in its Google Shopping investigation. Here’s the key language from the editorial…

Read the full piece here

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Antitrust & Consumer Protection

Ag-biotech merger symposium wrap-up

TOTM On Thursday, March 30, Friday March 31, and Monday April 3, Truth on the Market and the International Center for Law and Economics presented a blog symposium . . .

On Thursday, March 30, Friday March 31, and Monday April 3, Truth on the Market and the International Center for Law and Economics presented a blog symposium — Agricultural and Biotech Mergers: Implications for Antitrust Law and Economics in Innovative Industries — discussing three proposed agricultural/biotech industry mergers awaiting judgment by antitrust authorities around the globe. These proposed mergers — Bayer/Monsanto, Dow/DuPont and ChemChina/Syngenta — present a host of fascinating issues, many of which go to the core of merger enforcement in innovative industries — and antitrust law and economics more broadly.

Read the full piece here.

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Antitrust & Consumer Protection

Innovation as a shield and a club in the agribusiness mergers

TOTM People need to eat. All else equal, the more food that can be produced from an acre of land, the better off they’ll be. Of . . .

People need to eat. All else equal, the more food that can be produced from an acre of land, the better off they’ll be. Of course, people want to pay as little as possible for their food to boot. At heart, the antitrust analysis of the pending agribusiness mergers requires a simple assessment of their effects on food production and price. But making that assessment raises difficult questions about institutional competence.

Read the full piece here.

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Antitrust & Consumer Protection

Agricultural and Biotech Mergers: Implications for Antitrust Law and Economics in Innovative Industries

Truth on the Market and the International Center for Law and Economics presented a blog symposium discussing three proposed agricultural/biotech industry mergers awaiting judgment by antitrust authorities around the globe.

Agricultural and Biotech Mergers: Implications for Antitrust Law and Economics in Innovative Industries

March 30, March 31, and April 3, 2017

On March 27, 2017, the European Commission cleared the merger of Dow and DuPont, subject to conditions including divestiture of DuPont’s “global R&D organisation.” As the Commission noted:

The Commission had concerns that the merger as notified would have reduced competition on price and choice in a number of markets for existing pesticides. Furthermore, the merger would have reduced innovation. Innovation, both to improve existing products and to develop new active ingredients, is a key element of competition between companies in the pest control industry, where only five players are globally active throughout the entire research & development (R&D) process.

In addition to the traditional focus on price effects, the merger’s presumed effect on innovation loomed large in the EC’s consideration of the Dow/DuPont merger — as it is sure to in its consideration of the other two pending mergers in the agricultural biotech and chemicals industries between Bayer and Monsanto and ChemChina and Syngenta. Innovation effects are sure to take center stage in the US reviews of the mergers, as well.

What is less clear is exactly how antitrust agencies evaluate — and how they should evaluate — mergers like these in rapidly evolving, high-tech industries.

These proposed mergers present a host of fascinating and important issues, many of which go to the core of modern merger enforcement — and antitrust law and economics more generally. Among other things, they raise issues of:

  • The incorporation of innovation effects in antitrust analysis;
  • The relationship between technological and organizational change;
  • The role of non-economic considerations in merger review;
  • The continued relevance (or irrelevance) of the Structure-Conduct-Performance paradigm;
  • Market definition in high-tech markets; and
  • The patent-antitrust interface

This symposium brought together a stellar lineup of scholars to consider these and related issues.

Participants:

  • Allen Gibby, Senior Fellow for Law & Economics, International Center for Law & Economics
  • Shubha Ghosh, Crandall Melvin Professor of Law and Director of the Technology Commercialization Law Program, Syracuse University College of Law
  • Ioannis Lianos,  Chair of Global Competition Law and Public Policy, Faculty of Laws, University College London
  • John E. Lopatka, A. Robert Noll Distinguished Professor of Law, Penn State Law School
  • Geoffrey A. Manne, Executive Director, International Center for Law & Economics
  • Diana L. Moss, President, American Antitrust Institute
  • Nicolas Petit, Professor of Law, Faculty of Law, and Co-director, Liege Competition and Innovation Institute, University of Liege
  • Levi A. Russell, Assistant Professor, Agricultural & Applied Economics, University of Georgia
  • Joanna M. Shepherd, Professor of Law, Emory University School of Law
  • Michael Sykuta, Associate Professor, Agricultural and Applied Economics, and Director, Contracting Organizations Research Institute, University of Missouri
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Antitrust & Consumer Protection

Announcement: TOTM blog symposium on agricultural and biotech mergers

TOTM Earlier this week the European Commission cleared the merger of Dow and DuPont, subject to conditions including divestiture of DuPont’s “global R&D organisation.” As the . . .

Earlier this week the European Commission cleared the merger of Dow and DuPont, subject to conditions including divestiture of DuPont’s “global R&D organisation.” As the Commission noted:

The Commission had concerns that the merger as notified would have reduced competition on price and choice in a number of markets for existing pesticides. Furthermore, the merger would have reduced innovation. Innovation, both to improve existing products and to develop new active ingredients, is a key element of competition between companies in the pest control industry, where only five players are globally active throughout the entire research & development (R&D) process.

In addition to the traditional focus on price effects, the merger’s presumed effect on innovation loomed large in the EC’s consideration of the Dow/DuPont merger — as it is sure to in its consideration of the other two pending mergers in the agricultural biotech and chemicals industries between Bayer and Monsanto and ChemChina and Syngenta. Innovation effects are sure to take center stage in the US reviews of the mergers, as well.

Read the full piece here.

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Antitrust & Consumer Protection

Significant Impediment To Industry Innovation: A novel theory of harm in EU merger policy?

TOTM In Brussels, the talk of the town is that the European Commission (“Commission”) is casting a new eye on the old antitrust conjecture that prophesizes . . .

In Brussels, the talk of the town is that the European Commission (“Commission”) is casting a new eye on the old antitrust conjecture that prophesizes a negative relationship between industry concentration and innovation. This issue arises in the context of the review of several mega-mergers in the pharmaceutical and AgTech (i.e., seed genomics, biochemicals, “precision farming,” etc.) industries.

Read the full piece here.

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Antitrust & Consumer Protection

Everything is amazing — and no one at the European Commission is happy

TOTM Since the European Commission (EC) announced its first inquiry into Google’s business practices in 2010, the company has been the subject of lengthy investigations by . . .

Since the European Commission (EC) announced its first inquiry into Google’s business practices in 2010, the company has been the subject of lengthy investigations by courts and competition agencies around the globe. Regulatory authorities in the United States, France, the United Kingdom, Canada, Brazil, and South Korea have all opened and rejected similar antitrust claims.

And yet the EC marches on, bolstered by Google’s myriad competitors, who continue to agitate for further investigations and enforcement actions, even as we — companies and consumers alike — enjoy the benefits of an increasingly dynamic online marketplace.

Read the full piece here.

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Antitrust & Consumer Protection