ICLE Chief Economist Brian Albrecht was a guest on the Lead-Lag Live podcast to discuss the issues of market concentration, inflation, and the role of “superstar” firms in the economy. Audio of the full episode is embedded below.

The European Commission told Amazon in November 2023 of its preliminary view that the company’s proposed acquisition of iRobot restricted competition in the market for robot vacuum cleaners (RVCs) and could hamper rival RVC suppliers’ ability to compete effectively. The deal, the Commission asserted, would give Amazon incentive to foreclose iRobot’s competitors by engaging in several anticompetitive strategies, including delisting rival RVCs from its marketplace, reducing their visibility, limiting access to certain widget or attractive product labels (“Amazon’s Choice,” “Works with Alexa”), and/or raising rivals’ sales and advertising costs. 

Recently, and in anticipation of a negative clearance decision from the Commission, Amazon and iRobot jointly announced they had terminated their acquisition agreement. 

Read the full piece here.

ICLE Director of Law & Economics Programs Gus Hurwitz was a guest on The Cyberlaw Podcast, where he discussed big news for cord-cutting sports fans, Amazon’s ad-data deal with Reach, a novel Federal Trade Commission case brought against Blackbaud, the Federal Communications Commission’s ban on AI-generated voice cloning in robocalls, and South Korea’s pause on implementation of its anti-monopoly platform act. Audio of the full episode is embedded below.

In a little less than a month, the European Union’s Digital Markets Act (DMA) will start to bite, but how will it taste?

By March 7, companies that were designated as “gatekeepers” in September 2023 will be required to meet the obligations of Articles 5, 6, and 7 of the DMA Regulation. With the exception of ByteDance Ltd., the Chinese owners of TikTok, all of the designated companies have, by now, presented compliance proposals. The DMA’s expected beneficiaries (and, arguably, the loudest in favor of its passage) have been disappointed by some of these proposals, and seek more. But should the European Commission grant them what they are asking for?

Read the full piece here.

The government has become increasingly suspicious of major mergers over the past decade, under both political parties. The Justice Department under Donald Trump sued to prevent AT&T from buying Time Warner. The Federal Trade Commission under President Biden is continuing a case the Trump administration initiated against Meta, parent of Facebook, to force the firm to cough up Instagram and WhatsApp, which it swallowed during the Obama years. In January, JetBlue Airways’ plans to merge with Spirit Airlines and Amazon’s plans to acquire iRobot were deterred under regulatory pressure.

Read the full piece here.

The National Institute for Standards and Technology (NIST) published a request for information (RFI) in December 2023 on its “Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights.” It’s quite something, if not in a good way.

Read the full piece here.

Abstract

This chapter builds on Klein (2005) to provide an updated literature review on make-or-buy decisions incorporating the most recent theories, methods, and data sources used and considering newer phenomena related to vertical boundaries, as well as sketching out some future directions of this literature. After summarizing the most common explanations for make-versus-buy we discuss methodological challenges including data, measurement, and estimation techniques then review empirical findings on component procurement, the use of contracts and contractual design, and newer organizational forms such as platforms. We then discuss ongoing challenges and implications for future work. While the literature on make-or-buy decisions has grown and diversified over the last twenty years, the core insights of the transaction cost approach and its basic explanatory power in helping us make sense of vertical boundaries remain the same.

ICLE Senior Scholar Daniel J. Gilman took part in a virtual panel convened by the Federalist Society on the Federal Trade Commission (FTC) and U.S. Justice Department’s (DOJ) recent moves to put labor issues at the center of antitrust enforcement and policy making. Video of the full event is embedded below.

Abstract

In administering the antitrust laws, is it relevant what a firm’s market power was when a business practice was first implemented? Relatedly, should the commonness of a practice — in terms of use by other firms in a market or industry — be a consideration when assessing its legality? This article proposes that, under certain, well-specified conditions, the legacy of a business practice and its commonness within a market can be used as a “marginally procompetitive presumption” under the rule of reason framework. Specifically, if a practice was implemented before a firm obtained substantial market power or a practice is commonly used by other firms across the market power spectrum, then the burden placed on defendants to demonstrate the practice is procompetitive should be lessened in proportion to the strength of the legacy and commonality.

Read at SSRN.