Research Programs
More
What are you looking for?
Showing Latest Publications
TOTM A bipartisan group of senators unveiled legislation today that would dramatically curtail the ability of online platforms to “self-preference” their own services—for example, when Apple pre-installs its . . .
A bipartisan group of senators unveiled legislation today that would dramatically curtail the ability of online platforms to “self-preference” their own services—for example, when Apple pre-installs its own Weather or Podcasts apps on the iPhone, giving it an advantage that independent apps don’t have. The measure accompanies a House bill that included similar provisions, with some changes.
Read the full piece here.
TOTM Recent commentary on the proposed merger between WarnerMedia and Discovery, as well as Amazon’s acquisition of MGM, often has included the suggestion that the online content-creation and . . .
Recent commentary on the proposed merger between WarnerMedia and Discovery, as well as Amazon’s acquisition of MGM, often has included the suggestion that the online content-creation and video-streaming markets are excessively consolidated, or that they will become so absent regulatory intervention. For example, in a recent letter to the U.S. Justice Department (DOJ), the American Antitrust Institute and Public Knowledge opine that…
TOTM A lawsuit filed by the State of Texas and nine other states in December 2020 alleges, among other things, that Google has engaged in anticompetitive conduct . . .
A lawsuit filed by the State of Texas and nine other states in December 2020 alleges, among other things, that Google has engaged in anticompetitive conduct related to its online display-advertising business.
Popular Media Mergers and acquisitions in tech have come under intense scrutiny in recent years. Some fear that Big Tech companies like Google and Facebook have been . . .
Mergers and acquisitions in tech have come under intense scrutiny in recent years. Some fear that Big Tech companies like Google and Facebook have been able to protect their market positions by acquiring smaller would-be competitors and stifling competition as a result.
Scholarship A joint publication of ICLE and The Entrepreneurs Network makes the case that the U.K. government's plan to crack down on Big Tech mergers would harm the British start-up ecosystem.
The British government is consulting on whether to lower the burden of proof needed by the Competition and Markets Authority (CMA) to block mergers and acquisitions involving large tech companies that have been deemed as having strategic market status (SMS) in some activity. This is likely to include companies like Google and Facebook, but the scope may grow over time.
Under the current regime, the CMA uses a two-step process. At Phase 1, the CMA assesses whether or not a deal has a ‘realistic prospect of a substantial lessening of competition’. If so, the merger is referred to Phase 2, where it is assessed in depth by an independent panel, and remedied or blocked if it is deemed to carry a greater than 50 per cent chance of substantially lessening competition.
The reforms proposed by the government would stop any deal involving a SMS firm that creates a ‘realistic prospect’ of reducing competition. This has been defined by courts as being a ‘greater than fanciful’ chance.
In practice, this could amount to a de facto ban on acquisitions by Big Tech firms in the UK, and any others designated as having strategic market status.
Mergers and acquisitions are normally good or neutral for competition, and there is little evidence that the bulk of SMS firms’ mergers have harmed competition.
Although the static benefits of mergers are widely acknowledged, the dynamic benefits are less well-understood. We highlight four key ways in which mergers and acquisitions can enhance competition by increasing dynamic efficiency:
Acquisition is a key route to exit for entrepreneurs
Acquisitions enable a ‘market for corporate control’
Acquisitions can reduce transaction costs between complementary products
Acquisitions can support inter-platform competition
The UK risks becoming a global outlier
The Government’s theories of harm caused by tech mergers are under-evidenced, hard to action, and do not require a change in the burden of proof to be effectively incorporated into the CMA’s merger review process.
The Government should instead consider a more moderate approach that retains the balance of probabilities approach, but that attempts to drive competition by supporting startups and entrepreneurs, and gives the CMA the tools it needs to do the best job it can within the existing burden of proof.
Read the full white paper here.
Regulatory Comments ICLE submitted comments to the Federal Trade Commission about potential rulemaking to prohibit employee non-compete clauses and various other forms of exclusive dealing.
Petitioners in this proceeding have called for the FTC to use its rulemaking authority pertaining to unfair methods of competition to prohibit employee non-compete clauses and various forms of exclusive dealing. These rulemaking proposals are deeply misguided from both a procedural and substantive standpoint, however.
Bright-line competition rules, as opposed to broader judicially enforced standards, are appropriate only when it is possible to isolate a category of identical practices that routinely harm competition. This is not the case for the categories of conduct currently under consideration. More fundamentally, these calls ignore positive and significant consumer benefits generated by vertical agreements, in general, and exclusive dealing and non-competes, more specifically. Critics seem to assume that powerful firms foist these exclusive agreements upon their helpless commercial partners (whether employees or other companies). Yet a vast body of economic literature clearly rejects this premise. Instead, it shows that these clauses entail costs and benefits that each party must carefully weigh when they a enter into a commercial relationship.
Of course, this does not mean that non-compete clauses or exclusive dealing should be categorically out of bounds for antitrust authorities. Rather, they should be assessed on a case-by-case basis (i.e., under the rule of reason), accounting for both their pro- and anti-competitive potential. This would limit enforcement efforts only to the limited instances where those clauses harm consumers, thereby preserving the tremendous aggregate benefits they generate.
Read the full public comments here.
Scholarship Abstract Today’s technology standards are the result of an extraordinary amount of innovation, collaboration and competition. These concepts are interrelated and each is enhanced or . . .
Today’s technology standards are the result of an extraordinary amount of innovation, collaboration and competition. These concepts are interrelated and each is enhanced or enabled by intellectual property. Where these three concepts come together in standards development, it is unsurprising that antitrust concerns are also present. Specifically, the interests of contributors, participants, and implementers must be fairly balanced to ensure that the appropriate types and levels of innovation, collaboration, and competition can occur – and that the public will benefit therefrom. It is important that antitrust enforcement involving standards development organizations and owners of standards essential patents recognize the careful balance of these three concepts. If antitrust enforcement elevates one goal – say competition – at the expense of collaboration and innovation, or if one set of actors in the standards development ecosystem – for example, implementers – is preferred over the other actors, there will likely be devastating effects on the standards development ecosystem.
The tension between innovation, collaboration, and competition in the standards development arena, as well as the divergent interests of contributors, participants, and implementers are not new. The two agencies charged with enforcing competition policy in the United States, the Federal Trade Commission (FTC) and the Department of Justice, Antitrust Division (DOJ), have long wrestled with promoting both innovation and competition, as well as understanding how collaboration can enhance these ideas. Although the policies regarding innovation, competition, and collaboration have historically bounced around, when considering standardized technology, both the FTC and DOJ have recently shifted the balance in favor of implementers and acted in ways that created impediments to innovation (and thus ultimately competition and collaboration) in the standards development area. Between 2015 and 2019, however, the viewpoints of these two agencies diverged. The FTC continued to rely on outdated perspectives and theories that have been called into question. In doing so, the FTC has favored implementers over contributors in ways that are harmful to innovation. On the other hand, the DOJ (under Makan Delrahim) recognized that its previously-held viewpoints are obsolete and was actively seeking to reset the balance between competition and innovation, between innovator and implementer. This paper argues that we must look carefully at the underlying policies driving the agencies’ behavior, both the outmoded viewpoints that the FTC is pressing as well as the innovation-positive perspective that has shaped the DOJ’s actions in recent years. By amplifying the modern perspective and focusing on creating the right incentives for the right reasons, future imbalances that harm innovation, collaboration, and competition in the standards world can be avoided.
TOTM Federal Trade Commission (FTC) Chair Lina Khan’s Sept. 22 memorandum to FTC commissioners and staff—entitled “Vision and Priorities for the FTC” (VP Memo)—offers valuable insights into the . . .
Federal Trade Commission (FTC) Chair Lina Khan’s Sept. 22 memorandum to FTC commissioners and staff—entitled “Vision and Priorities for the FTC” (VP Memo)—offers valuable insights into the chair’s strategy and policy agenda for the commission. Unfortunately, it lacks an appreciation for the limits of antitrust and consumer-protection law; it also would have benefited from greater regulatory humility. After summarizing the VP Memo’s key sections, I set forth four key takeaways from this rather unusual missive.
Popular Media Congressional Republicans face a dilemma in determining how they want to approach Big Tech. Some perceive the largest tech companies to have too much power . . .
Congressional Republicans face a dilemma in determining how they want to approach Big Tech. Some perceive the largest tech companies to have too much power over political speech, power that can be used to censor conservatives. Many fear that so-called “woke” opinions are artificially promoted by tech companies whose employees agree with them, while news stories that contradict that narrative are downplayed.