Policy discussions about the use of personal data often have “less is more” as a background assumption; that data is overconsumed relative to some hypothetical optimal baseline. This overriding skepticism has been the backdrop for sweeping new privacy regulations, such as the California Consumer Privacy Act (CCPA) and the EU’s General Data Protection Regulation (GDPR).

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We thank the Commission for the opportunity to comment on its Advance Notice of Proposed Rulemaking (“ANPRM”) concerning future amendments to the premerger notification rules under the Hart-Scott-Rodino Antitrust Improvements Act (“HSR’’).

The International Center for Law and Economics (ICLE) is a nonprofit, nonpartisan research center whose work promotes the use of law & economics methodologies to inform public policy debates. We believe that intellectually rigorous, data-driven analysis will lead to efficient policy solutions that promote consumer welfare and global economic growth.

ICLE’s scholars have written extensively on competition and consumer protection policy. Some of our writings are included as references in the comment below. Additional materials may be found at our website: www.laweconcenter.org.

Our comment argues that the FTC’s rulemaking initiatives should be informed by the error-cost framework. As we explain, the framework offers several key insights that authorities should carefully consider when reviewing existing merger rules and guidance.

Among other things, it demonstrates that the societal costs stemming  from false negatives (i.e. anticompetitive mergers that evade antitrust enforcement) are inextricably linked to those that originate from false positives (efficient mergers that are prohibited or deterred) and administrative costs (the social costs that are created by the operation of a given regulatory regime). As a result, any attempt to reduce one of these costs necessary entails a tradeoff as far as the others are concerned. All three costs should thus be considered together.

In short, we urge the FTC to take a holistic view when updating HSR rules and interpretations of those rules. In particular, it is important to consider the overall welfare costs of new rules, and not just their ability to plug existing enforcement gaps.

Read the full comments here.

Background…

The European Union has unveiled draft legislation that seeks to tame so-called “gatekeeper” Big Tech firms. If passed into law, this Digital Markets Act (“DMA”) would create a list of “dos and don’ts” by which the platforms must abide, such as allowing interoperability with third parties and sharing data with rivals. In short, the DMA would give the European Commission significant powers to tell tech companies how to run their businesses.

But…

The DMA essentially shifts competition enforcement against gatekeeper platforms away from an “effects” analysis that weighs costs and benefits to a “blacklist” approach that proscribes all listed practices as harmful. This will constrain platforms’ ability to experiment with new products and make changes to existing ones, limiting their ability to innovate and compete.

Read the full explainer here.

It has been a brutal few days for Parler, the now-infamous Twitter alternative favored by President Donald Trump’s most die-hard supporters. Both Google and Apple removed the app from their online stores, and the site went offline altogether after Amazon Web Services (AWS) suspended its webhosting account with little notice.

Parler responded to this deplatforming by filing an antitrust suit against Amazon, which is certain to fail and may not even survive a motion to dismiss. The crux of Parler’s antitrust case is that Amazon conspired with Twitter to eliminate its service. But the company’s filing contains not a single allegation of reduced competition relevant to antitrust law, let alone evidence to back up such claims.

Read the full piece here.

If passed into law, this Digital Markets Act (“DMA”) would fundamentally alter the way these platforms conduct business in Europe. But European Commission officials have been so preoccupied with how to regulate Big Tech that they never stopped to consider whether they should. Indeed, these new rules could have unintended consequences that hamper digital markets in the EU.

Read the full piece here.

The Federal Trade Commission and 46 state attorneys general (along with the District of Columbia and the Territory of Guam) filed their long-awaited complaints against Facebook Dec. 9. The crux of the arguments in both lawsuits is that Facebook pursued a series of acquisitions over the past decade that aimed to cement its prominent position in the “personal social media networking” market.

Read the full piece here.

The European Court of Justice issued its long-awaited ruling Dec. 9 in the Groupe Canal+ case. The case centered on licensing agreements in which Paramount Pictures granted absolute territorial exclusivity to several European broadcasters, including Canal+.

Read the full piece here.

The European Commission’s recent Google Android decision will go down as one of the most important competition proceedings of the past decade. Yet, in-depth reading of the 328-page decision leaves attentive readers with a bitter taste. The problem is simple: while the facts adduced by the Commission are arguably true, the normative implications it draws—and thus the bases for its action—are largely conjecture.

This paper argues that the Commission’s decision is undermined by unsubstantiated claims and non sequiturs, the upshot of which is that the Commission did not establish that Google had a “dominant position” in an accurately defined market, or that it infringed competition and harmed consumers. The paper analyzes the Commission’s reasoning on questions of market definition, barriers to entry, dominance, theories of harm, and the economic evidence adduced to support the decision.

Section I discusses the Commission’s market definition It argues that the Commission produced insufficient evidence to support its conclusion that Google’s products were in a different market than Apple’s alternatives.

Section II looks at the competitive constraints that Google faced. It finds that the Commission wrongly ignored the strong competitive pressure that rivals, particularly Apple, exerted on Google. As a result, it failed to adequately establish that Google was dominant – a precondition for competition liability under article 102 TFEU.

Section III focuses on Google’s purported infringements. It argues that Commission failed to convincingly establish that Google’s behavior prevented its rivals from effectively reaching users of Android smartphones. This is all the more troubling when one acknowledges that Google’s contested behavior essentially sought to transpose features of its rivals’ closed platforms within the more open Android ecosystem.

Section IV reviews the main economic arguments that underpin the Commission’s decision. It finds that the economic models cited by the Commission poorly matched the underlying fact patterns. Moreover, the Commission’s arguments on innovation harms were out of touch with the empirical literature on the topic.

In short, the Commission failed to adequately prove that Google infringed European competition law. Its decision thus sets a bad precedent for future competition intervention in the digital sphere.

For the third in my series of posts about the Google Android decision, I will delve into the theories of harm identified by the Commission.

Read the full piece here.