Research Programs
More
What are you looking for?
Showing 9 of 52 Results in Antitrust Populism
Written Testimonies & Filings On Friday, April 17, 2020, ICLE President and Founder, Geoffrey A. Manne, submitted written testimony to the U.S. House of Representatives Committee on the Judiciary, Subcommittee on Antitrust, Commercial, and Administrative Law.
On Friday, April 17, 2020, ICLE President and Founder, Geoffrey A. Manne, submitted written testimony to the U.S. House of Representatives Committee on the Judiciary, Subcommittee on Antitrust, Commercial, and Administrative Law. Mr. Manne contends that underlying much of the contemporary antitrust debate are two visions of how an economy should work.
One vision, which tends to favor more intervention and regulation than the status quo, sees the economy and society as being constructed from above by laws and courts. In this view, suspect business behavior must be justified to be permitted, and . . . the optimal composition of markets can be known and can be designed by well-intentioned judges and legislators. On the other hand, there is the view of individual and company behavior as emerging from each person’s actions within a framework of property rights and the rule of law. This view sees the economy as a messy discovery process, with business behavior often being experimental in nature. This second conception often sees government intervention as risky, because it assumes a level of knowledge about the dynamics of markets that is impossible to obtain.
One vision, which tends to favor more intervention and regulation than the status quo, sees the economy and society as being constructed from above by laws and courts. In this view, suspect business behavior must be justified to be permitted, and . . . the optimal composition of markets can be known and can be designed by well-intentioned judges and legislators.
On the other hand, there is the view of individual and company behavior as emerging from each person’s actions within a framework of property rights and the rule of law. This view sees the economy as a messy discovery process, with business behavior often being experimental in nature. This second conception often sees government intervention as risky, because it assumes a level of knowledge about the dynamics of markets that is impossible to obtain.
In Manne’s view,
Antitrust law and enforcement policy should, above all, continue to adhere to the error-cost framework, which informs antitrust decision-making by considering the relative costs of mistaken intervention compared with mistaken non-intervention. Specific cases should be addressed as they come, with an implicit understanding that, especially in digital markets, precious few generalizable presumptions can be inferred from the previous case. The overall stance should be one of restraint, reflecting the state of our knowledge. We may well be able to identify anticompetitive harm in certain cases, and when we do, we should enforce the current laws. But dramatic new statutes that undo decades of antitrust jurisprudence or reallocate burdens of proof with the stroke of a pen are unjustified.
Manne goes on to address several of the most important and common misperceptions that seem to be fueling the current drive for new and invigorated antitrust laws. These misperceptions are that:
See his full testimony, here.
TOTM The antitrust populist ranks are chock-a-block with economists, policy wonks, and go-getter attorneys. If they are so confident in their claims of rising concentration, bad behavior, and harm to consumers, suppliers, and workers, then they should put those ideas to the test with some slam dunk litigation.
Antitrust populists have a long list of complaints about competition policy, including: laws aren’t broad enough or tough enough, enforcers are lax, and judges tend to favor defendants over plaintiffs or government agencies. The populist push got a bump with the New York Times coverage of Lina Khan’s “Amazon’s Antitrust Paradox” in which she advocated breaking up Amazon and applying public utility regulation to platforms. Khan’s ideas were picked up by Sen. Elizabeth Warren, who has a plan for similar public utility regulation and promised to unwind earlier acquisitions by Amazon (Whole Foods and Zappos), Facebook (WhatsApp and Instagram), and Google (Waze, Nest, and DoubleClick).
Read the full piece here.
TOTM Amazon is again accused of being a predatory pricer, once again the evidence and theory to support this is nonexistent. Shaoul Sussman's complicated argument that the use of grey market sellers to force higher prices throughout the economy, doesn't add up.
These days, lacking a coherent legal theory presents no challenge to the would-be antitrust crusader. In a previous post, we noted how Shaoul Sussman’s predatory pricing claims against Amazon lacked a serious legal foundation. Sussman has returned with a new post, trying to build out his fledgling theory, but fares little better under even casual scrutiny.
Join us for our third annual international competition policy conference on December 4th, 2019.
VIEW SLIDE PRESENTATIONS HERE
Over the past few years, numerous scholars, journalists, and others have argued that online platforms such as Google, Amazon, and Facebook are behaving anti-competitively. In response, competition authorities in the EU, UK, and Australia have issued reports on these platforms and Canada has introduced a Digital Charter. In addition, competition authorities in the EU and Germany have already brought antitrust actions against several platforms, and US antitrust authorities are investigating several of the larger platform companies.
We believe it is important to discuss the merits and drawbacks of these actions and reports — and to examine the fundamental tension that generally exists in the law between liability for harm and innovation. To that end, we are inviting some of the leading experts on the law and economics of competition policy.
Reports that will be covered:
ACCC, Digital Platforms Inquiry
European Commission, Competition Policy for the Digital Era
Unlocking digital competition Report of the Digital Competition Expert Panel
Canada’s Digital Charter in Action: A Plan by Canadians, for Canadians
The International Center for Law & Economics and Utrecht University School of Law
TOTM Complexity need not follow size. A star is huge but mostly homogenous. “It’s core is so hot,” explains Martin Rees, “that no chemicals can exist (complex . . .
Complexity need not follow size. A star is huge but mostly homogenous. “It’s core is so hot,” explains Martin Rees, “that no chemicals can exist (complex molecules get torn apart); it is basically an amorphous gas of atomic nuclei and electrons.”
Nor does complexity always arise from remoteness of space or time. Celestial gyrations can be readily grasped. Thales of Miletus probably predicted a solar eclipse. Newton certainly could have done so. And we’re confident that in 4.5 billion years the Andromeda galaxy will collide with our own.
Written Testimonies & Filings On December 19, 2018, ICLE President and Founder, Geoffrey A. Manne testified before the US Senate Committee on the Judiciary's Subcommittee on Antitrust, Competition Policy and Consumer Rights to discuss the differences between the antitrust regimes in the US and the EU, and the inadvisability of importing EU policy into the US.
On December 19, 2018, ICLE President and Founder, Geoffrey A. Manne testified before the US Senate Committee on the Judiciary’s Subcommittee on Antitrust, Competition Policy and Consumer Rights to discuss the differences between the antitrust regimes in the US and the EU, and the inadvisability of importing EU policy into the US. Mr. Manne noted:
An increasing number of scholars and advocates have argued recently that US antitrust law should be “reformed” in order to invigorate antitrust enforcement and sidestep the judicially-imposed constraints that have developed over antitrust’s 100 year history. Explicitly or not, these efforts seek to bring about a shift in US antitrust that would make it more closely resemble competition law in Europe. While these scholars and advocates assert that their proposals would improve economic conditions in the US, economic logic and the apparent reality from Europe suggest otherwise. *** Although the differences between US and EU antitrust law can appear minor or superficial at a glance, even small differences can have important consequences, and the cumulative effect of the differences is significant. Although the Commission is often quite careful to couch its decision-making in economic language, in practice, analytical economic administration of antitrust is far from the norm. *** Despite asserting that EU competition law is “better” than that of the US, and that emulating the EU will improve economic conditions in the US, references to the likely outcome — positive or negative — of the expanded antitrust experiment in the EU are not provided. Moreover, as noted below, to the extent the European experience is assessed at all, these assessments are manifestly unreliable.
An increasing number of scholars and advocates have argued recently that US antitrust law should be “reformed” in order to invigorate antitrust enforcement and sidestep the judicially-imposed constraints that have developed over antitrust’s 100 year history. Explicitly or not, these efforts seek to bring about a shift in US antitrust that would make it more closely resemble competition law in Europe. While these scholars and advocates assert that their proposals would improve economic conditions in the US, economic logic and the apparent reality from Europe suggest otherwise.
***
Although the differences between US and EU antitrust law can appear minor or superficial at a glance, even small differences can have important consequences, and the cumulative effect of the differences is significant. Although the Commission is often quite careful to couch its decision-making in economic language, in practice, analytical economic administration of antitrust is far from the norm.
Despite asserting that EU competition law is “better” than that of the US, and that emulating the EU will improve economic conditions in the US, references to the likely outcome — positive or negative — of the expanded antitrust experiment in the EU are not provided. Moreover, as noted below, to the extent the European experience is assessed at all, these assessments are manifestly unreliable.
The full testimony documents the many relevant differences, in particular the way that competition law in the EU and its member states vests enforcers with broad discretion. By comparison, the US standards impose requirements of conducting careful economic analysis in order to prove a competitive harm. The net effect is that the US antitrust approach provides both certainty for firms and consumers, and discipline for enforcers.
The oral testimony is available here.
The full video of the hearing is available here.
The full testimony is available here.
Written Testimonies & Filings FTC Hearings on Competition & Consumer Protection in the 21 st Century. Comments of the International Center for Law & Economics: Antitrust Principles and Evidence-Based Antitrust Under the Consumer Welfare Standard. Hearing #1 (Sep. 13, 2018). Submitted October 14, 2018.
Since the original Pitofsky hearings at the dawn of the Internet era, much has fundamentally changed in the way the firms do businesses. Yet, despite these rapid and fundamental shifts in technology and behavior, we still face many of the same policy challenges as existed twenty-plus years ago. Innovation always yields both costs and benefits, meaning that some firms will face adverse effects as the environment in which they developed their business changes. Unfortunately, some antitrust observers use this reality as an opportunity to advocate for problematic changes in the underlying law.
Yet, in the face of these changes, time-tested antitrust principles become even more important, and the focus of enforcers and lawmakers should be in favor or maintaining and strengthening the existing consumer welfare standard. It is a standard rooted in testable, empirical realities, and is designed to lead to reproducible outcomes that redound to the benefit of consumers. These comments explore a number of important areas, including:
By combining lessons from the history of antitrust policy and contemporary economics, this analysis elucidates the key issues faced by the antitrust enforcers as they consider the future of antitrust policy. To date, no better alternative has been proposed, and enforcement agencies should tread lightly when considering alterations that would undermine the solid foundations of antitrust law. The unfortunate outcome of many calls to reform would be to return antitrust law to an era of politicized enforcement, lower consumer welfare, and greater uncertainty for firms operating in the economy.
Click here to read the full comments.
Written Testimonies & Filings FTC Hearings on Competition & Consumer Protection in the 21st Century. Comments of the International Center for Law & Economics: The current landscape of competition and consumer protection law and policy. Hearing #1 (Sep. 13, 2018). Submitted October 14, 2018.
Despite the vast social benefits generated by companies operating in the digital economy, this economic transformation has stoked fears amongst members of the general public, the press, and policymakers. It has led to calls for interventionist policies such as heightened antitrust enforcement, sector-specific regulation, and direct intervention against industry concentration.
Unfortunately, there is insufficient evidence and, at best, ambivalent theory to support any of these proposed policies—and in the absence of a strong basis for adopting them, the proposed policies would do more harm than good. Among other things, economies of scale, economies of scope, network effects, and the like may bring about larger firms and more concentrated markets along with considerable consumer benefits. And new markets necessarily imply the consolidation of some firms and the exit of others, as competitors vie to come up with the winning paradigm.
Against the backdrop of this evolutionary process, it is critical that authorities avoid knee-jerk reactions that may impair the long-term welfare of consumers and firms alike.
To steer clear of these acute false positives, we urge policymakers to base their enforcement efforts on the tried and tested “law and economics” approach. This approach seeks to maximize consumer welfare and places a heavy emphasis on evidence-based scholarship. In doing so, it promotes innovation and minimizes the costs of policy errors.
Following this analytical framework will enable competition authorities to better address issues of exclusion and exploitation — as well as those of innovation and efficiency — in the digital economy.
Read the full comments here.
