Over the last 12 months, the Federal Trade Commission (FTC) held a series of hearings on Competition and Consumer Protection in the 21st Century. Throughout this dialogue, the International Center for Law and Economics (ICLE) has had a significant presence, including testimony at eight different sessions from ICLE President Geoffrey Manne, ICLE Director of Law and Economics Programs Justin (Gus) Hurwitz, and affiliate scholars Joshua D. Wright, Christopher Yoo, and Keith Hylton. ICLE also filed eleven written comments, culminating in our filing at the end of June, Concluding Comments: The Weaknesses of Interventionist Claims about the Consumer Welfare Standard, Vertical Mergers, Vertical Discrimination, Technology Platforms & Innovation, and Data Competition and Privacy.
Following are our key takeaways on some of the main issues discussed at the hearing. Below that are links to our contributions organized issue-by-issue and hearing-by-hearing.
The Consumer Welfare Standard
Opponents of the consumer welfare standard seek to return antitrust to the bygone era of courts arbitrarily punishing firms for successfully outcompeting their rivals or simply growing “too large.” The Commission should tread carefully before incorporating these ideas, which, during the course of its evolution in the 20th century, antitrust law carefully and correctly selected out.
Based on the testimony heard during the hearings, there is no need to change the non-horizontal merger guidelines. If anything, vertical merger review should be pared back out of a recognition that the failure to account for dynamic effects (and the inherent difficulty of doing so) means it is likely that pro-competitive mergers are being deterred.
Concerns regarding vertical discrimination are predicated on the erroneous assumption that big tech platforms might be harming competition by favoring their content over that of their complementors. Not only is this fear overblown, but even the harms alleged are frequently ambiguous and provide benefits to some consumers.
Technology Platforms and Innovation
Much of the analysis of popular technology companies is predicated on traditional market definition analysis, which infers future substitution possibilities from existing or past market conditions. This leads to overly-narrow market definitions and erroneous market power determinations. Thus, Amazon, Facebook, and Google are assumed — erroneously — to be unassailable monopolies.
Data Competition and Privacy
Data is a valuable input for companies competing in the digital economy. It is not, however, a magic bullet or holy grail, as some commenters suggested. As with other assets, companies can use data in both pro-competitive and anti-competitive ways. “Big data” may be a new term, but it does not pose unique problems for competition policy.