Abstract

The AI Act is poised to become a pillar of modern competition law. The present article seeks to provide competition practitioners with a practical yet critical guide to its key provisions. It concludes with suggestions for making the AI Act more competition friendly.

Read at SSRN.

ICLE President Geoff Manne joined the Tech Policy Podcast to discuss the Federal Trade Commission’s lawsuit against Amazon. Audio of the full episode is embedded below.

The continuing trial of Google, along with lawsuits against Amazon and Meta, have brought antitrust back into the public eye. These suits recall the 1969 case against IBM and the 1998 case against Microsoft, the great antitrust battles of the latter half of the 20th century.

Supporters of aggressive antitrust enforcement think that only antitrust suits prevented IBM from commandeering the personal-computer market and Microsoft from taking over the internet. But that’s an urban legend.

Read the full piece here.

ICLE Chief Economist Brian Albrecht joined the Human Action Podcast to discuss the work of Nobel Prize winner Claudia Goldin, with an emphasis on the male-female wage gap. Video of the full episode is embedded below.

A far-reaching bill currently before Parliament would turn the UK Competition and Markets Authority (CMA) into one of the world’s most powerful tech regulators. Unfortunately, taking the lead on regulation would almost certainly threaten Britain’s status as a leader in tech innovation.

Read the full piece here.

ICLE Director of Innovation Policy Kristian Stout appeared as a guest on Minnesota Public Radio’s Marketplace in a segment on the Federal Communications Commission’s decision to reinstate so-called “net neutrality” for broadband providers.

But Kristian Stout, director of innovation policy at the International Center for Law and Economics, argues that we don’t need net neutrality as much as we once did because most of us are already online now. So how do we ensure access for every last American?

“You don’t do that by upending or frustrating the investment incentives that have made this work really well for 90 to 95% of the country. What you do is try to figure out targeted solutions,” Stout said.

Audio of the full segment is embedded below.

STATEMENT OF AMICI INTEREST

Amici are law professors, economists, or other academics with expertise in competition law and economic regulation. Amici do not work for Tesla, nor have they been compensated in any way for their participation in this brief.[1]

SUMMARY OF ARGUMENT

Amici appear in support of Tesla on two issues with a common thread.[2] The district court’s opinion erred in insulating the actions of the Louisiana legislature and the Louisiana Motor Vehicle Commission (“LMVC”) from antitrust and constitutional review under a flawed framework for scrutinizing state regulations that suppress competition and favor economic special interests.

First, Amici submit that the district court erred in holding that commissioners of the LMVC were protected by Noerr-Pennington immunity when they “agreed with [the Louisiana Automobile Dealers Association (“LADA”)] to use the regulatory power of the Commission to investigate Tesla.” Op. at 27. Although public officials may enjoy Noerr-Pennington immunity when they act in a purely private capacity, a public official who is also a market participant and agrees with others to utilize public power in a manner designed to suppress competition in order to further his own economic interests should not be immunized from antitrust scrutiny. The Noerr-Pennington doctrine protects the rights of citizens to petition the government for redress of grievance. It does not protect governmental officials who conspire to use governmental power to favor their own economic interests. The district court’s approach would create a loophole in the antitrust laws permitting actors wielding state power to avoid responsibility for abuses of official power.

Second, Amici dispute the district court’s finding that Louisiana’s direct sales ban had a rational basis in consumer protection. As Amici explain below, direct sales bans in automotive retailing were historically focused on the exclusive goal of protecting dealers in franchise relationships with manufacturers. Thus, in the cases in which this Court upheld such statutes against constitutional challenge—Ford Motor Co. v. Texas Dep’t of Transp., 264 F.3d 493 (5th Cir. 2001); Int’l Truck & Engine Corp. v. Bray, 372 F.3d 717 (5th Cir. 2004)—the ostensible rational basis of the legislation was the protection of dealers against the superior bargaining power of their franchising manufacturers. But that logic can have no bearing on the application of Louisiana’s 2017, anti-Tesla direct sales prohibition, for the simple reason that Tesla (and other new electric vehicle manufacturers) do not use franchised dealers at all, but sell directly to the consuming public. In such circumstances, dealers are not being protected as franchisees, they are protected from economic competition by companies using a different business model—exactly what this Court held does not count as a rational basis in St. Joseph Abbey v. Castille, 712 F.3d 215 (5th Cir. 2013). Further, efforts to justify direct sales bans as consumer protection rather than dealer protection have no support in economic theory or evidence. Such arguments are mere pretexts for the economic protectionism that this Court has held does not survive equal protection scrutiny

[1] Amici join this brief solely in their individual capacities and express only their individual views. Institutional affiliations are listed for identification purposes only.

[2] Amici take no position on other arguments raised by Tesla’s appeal.

The draft Merger Guidelines released by the United States Department of Justice and the Federal Trade Commission (the Agencies) on July 19 feature many significant changes from earlier Guidelines. Of the 13 guidelines highlighted in the draft, two are particularly new and important for tech acquisitions. One is Guideline #4, which states that “mergers should not eliminate a potential entrant in a concentrated market.” The other is Guideline #9, which says that “when a merger is part of a series of multiple acquisitions, the agencies may examine the whole series” (emphases added).

Read the full piece here.

How did you come to be interested in the regulation of digital markets?

Prior to joining Levy & Salomão Advogados, I worked with the Brazilian government for nine years, four of which I served as head of the government agency in charge of antitrust enforcement and consumer protection policy. During this time, I was very lucky to participate in the early beginnings of the policy discussions on the need for enforcement in digital markets. Also, for a long time, this has been a very popular dinner conversation topic at home: my husband is in the software business and my stepdaughter is a computer engineer.

Read the full piece here.