Everyone is worried about growing concentration in U.S. markets. Biden’s executive order last year on competition starts with the statement that “excessive market concentration threatens basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups, and consumers.” No word on the threat of concentration to baby puppies, but the takeaway is clear. Concentration is everywhere, and it’s bad.

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Late last month, 25 former judges and government officials, legal academics and economists who are experts in antitrust and intellectual property law submitted a letter to Assistant Attorney General Jonathan Kanter in support of the U.S. Justice Department’s (DOJ) July 2020 Avanci business-review letter (ABRL) dealing with patent pools. The pro-Avanci letter was offered in response to an October 2022 letter to Kanter from ABRL critics that called for reconsideration of the ABRL. A good summary account of the “battle of the scholarly letters” may be found here.

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“Just when I thought I was out, they pull me back in!” says Al Pacino’s character, Michael Corleone, in Godfather III. That’s how Facebook and Google must feel about S. 673, the Journalism Competition and Preservation Act (JCPA).

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Background…

As leaders of the U.S. Senate work to pass the National Defense Authorization Act (NDAA) in the ongoing lame-duck session, some reports suggest that S. 673, the Journalism Competition and Preservation Act (JCPA), could be added to the legislative package. Approved in September 2022 by the Senate Judiciary Committee, the JCPA aims to boost the fortunes of traditional media companies by forcing “covered” online platforms to pay for digital journalism accessed via their services. The bill would require that platforms continue to display digital journalism, while setting out an intricate process whereby digital-journalism providers would collectively negotiate the price of content with platforms.

But…

This quixotic attempt to prop up flailing media firms will create legally sanctioned cartels that harm consumers, while forcing online platforms to carry and pay for content in ways that violate long-established principles of intellectual property, economic efficiency, and the U.S. Constitution.

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Reflecting on the decades of merger challenges brought to that point under the Clayton Antitrust Act of 1914, Justice Potter Stewart observed in 1966 that “the sole consistency I can find” is that “the Government always wins.”

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The Federal Trade Commission’s (FTC) recently released Policy Statement on unfair methods of competition (UMC) has a number of profound problems, which I will detail below. But first, some praise: if the FTC does indeed plan to bring many lawsuits challenging conduct as a standalone UMC (I am dubious it will), then the public ought to have notice about the change. Providing such notice is good government, and the new Statement surely provides that notice. And providing notice in this way was costly to the FTC: the contents of the statement make surviving judicial review harder, not easier (I will explain my reasons for this view below). Incurring that cost to provide notice deserves some praise.

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ICLE Director of Law & Economics Programs Gus Hurwitz joined a panel at the Gray Center’s Oct. 14 conference, “The Administration of Antitrust: The FTC and the Rule of Law.” The panel also featured Ashley Baker of the Committee for Justice and Howard Shelanski of the Georgetown University Law Center, and was moderated by ICLE Nonresident Scholar Joshua Wright. Audio of the discussion, archived by the Gray Center’s Gray Matters podcast, is embedded below.

The Federal Trade Commission’s (FTC) Nov. 10 Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act—adopted by a 3-1 vote, with Commissioner Christine Wilson issuing a dissenting statement—holds out the prospect of dramatic new enforcement initiatives going far beyond anything the FTC has done in the past. Of particular note, the statement abandons the antitrust “rule of reason,” rejects the “consumer welfare standard” that has long guided FTC competition cases, rejects economic analysis, rejects relevant precedent, misleadingly discusses legislative history, and cites inapposite and dated case law.

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President Joe Biden’s antitrust enforcers were desperate for a win. While claiming to be tough on antitrust, their track record has been far from impressive. The Federal Trade Commission and the Justice Department have challenged fewer mergers than they did during the Trump administration, and their challenges have rarely been successful. Now, the DOJ’s antitrust division has succeeded in blocking the merger of two publishing houses: Penguin–Random House and Simon & Schuster. Three weeks after the U.S. District Court in Washington, D.C., handed down an order halting the deal, Penguin’s corporate owner Bertelsmann made it official: the $2.2 billion merger has been scrapped.

Read the full piece here.