Franchising plays a key role in promoting American job creation and economic growth. As explained in Forbes (hyperlinks omitted)…

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Introduction

Business organizations can take many forms, from founder-led to multidivisional multinationals to emerging IT-enabled platforms. The prevailing organizational form in business is neither set in stone nor decided upon by fad. It is largely a result of the technological and economic conditions of the time. There were no large U.S. corporations before the emergence of the railroad because the production system neither required nor enabled scale, which corporations are designed to manage. When rail and industrial production technologies evolved after the Civil War, large corporations became the norm. Justice Louis Brandeis and other opponents of these new corporations sought to squelch them in their infancy, preferring a prior economy dominated by owner-led, small and mid-sized firms. Even with the passage of the Sherman Act, their opposition was largely stillborn; the benefits of the corporation were simply too vast. However, had the Brandeisians succeeded in their quest to turn back time, America would not be the global economic leader it is today.

We are potentially at a similar transformative point in history, with digital technologies enabling the rise of a new kind of productive organization: the platform. Digital platforms, not just in the information sector, have the potential to transform many industries for the better: raising productivity, improving quality and consumer choice, and reducing prices. But just as there was significant opposition against the transition to the corporate economy, today there is significant opposition to the platform economy, although this time not among the populace, but rather among the elites: activists, public intellectuals and academics, and elected officials of both parties. If their attempts to roll back the “platformization” of the U.S. economy succeed, the economic costs to the nation and to consumers would be considerable and long-lasting.

This report assesses the past two major changes in corporate form, and the public and government responses to them. It then examines the prospect and potential benefits of the “platformization” of the economy, as well as current opposition. Finally, it discusses the variety of policy approaches proposed to address platform governance and why most will lead to more harm than good.

The U.S. Department of Justice and eight states recently sued Google, claiming it runs its digital ad business to unfairly advantage its own business, to the detriment of its customers and potential rivals. Some commentators have expressed concerns that the government would make its case using novel and untested legal models, but Salil Mehra writes that these concerns are misplaced and that the case will be primarily argued using traditional antitrust law.

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The 117^th Congress closed out without a floor vote on either of the major pieces of antitrust legislation introduced in both chambers: the American Innovation and Choice Online Act (AICOA) and the Open Apps Market Act (OAMA). But it was evident at yesterday’s hearing of the Senate Judiciary Committee’s antitrust subcommittee that at least some advocates—both in academia and among the committee leadership—hope to raise those bills from the dead.

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There is a line of thinking according to which, without merger-control rules, antitrust law is “incomplete.” Without such a regime, the argument goes, whenever a group of companies faces with the risk of being penalized for cartelizing, they could instead merge and thus “raise prices without any legal consequences.”

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Abstract

Murmann and Vogt’s (2022) analysis of the automobile industry using a capabilities framework that integrates both dynamic and ordinary capabilities supports an informative table which sets out the major relevant capabilities that incumbents, start-ups, and diversifying entrants would need to develop or access via contract or other arrangement (see Murmann and Vogt, 2022, Table 3). Jiang and Lu (2022) have further discussed new industry paradigms which they suggest will greatly challenge – and perhaps overwhelm automotive industry incumbents. We believe that their insights can be taken a step further by focusing on two areas: first, the greatly increased availability of outsourced manufacturing driven by the shift to electric vehicle (‘EV’) powertrains; and second, the ongoing transformation of the driver and passenger experience that is driven by software–user experience software integrated with networked consumer service ecosystems.

ICLE Director of Law & Economics Programs Gus Hurwitz was a guest on The Cyberlaw Podcast to discuss the U.S. Supreme Court’s Gonzalez v. Google LLC case, the court’s first opportunity in a quarter century to construe the limits of Section 230 of the Communications Decency Act.

Other topics included likely U.S. Justice Department challenges to Adobe’s $20 Billion Figma deal and to JetBlue’s proposed acquisition of Spirit; the Federal Trade Commission’s (FTC) proposed ban on noncompete clauses; the FTC’s challenge to the Meta-Within merger; a European Union consultation designed to make U.S. platforms pay more of European telecom networks’ costs; Apple’s progress in devising a blood glucose monitor; and whether artificial intelligence is coming for lawyers’ jobs.

The full episode is embedded below.

ICLE President Geoffrey A. Manne joined a panel hosted by the Global Antitrust Institute examining the ever-changing competition policy landscape involving large digital platforms, including the litany of conduct alleged to give rise to antitrust violations, theories of harm emphasizing potential and nascent competition, labor market impacts, and, even, “toxic” or “predatory” innovation. Video of the full panel is embedded below.

Abstract

Complexity science permeates the policy spectrum but not antitrust. This is unfortunate. Complexity science provides a high-resolution screen on the empirical realities of markets. And it enables a rich understanding of competition, beyond the reductionist descriptions of markets and firms proposed by neoclassical models and their contemporary neo-Brandeisian critique. New insights arise from the key teachings of complexity science, like feedback loops and the role of uncertainty. The present article lays down the building blocks of a complexity-minded antitrust method.