Spotlight

July 2023

HIGHLIGHTS

ICLE Response to the FTC’s Cloud Computing RFI

Introduction The cloud-computing industry has undergone a transformation in recent years, driven by innovation, competition, and unprecedented demand for information-technology (IT) services. These comments assess . . .

Introduction

The cloud-computing industry has undergone a transformation in recent years, driven by innovation, competition, and unprecedented demand for information-technology (IT) services. These comments assess the state of competition in this burgeoning field, and we thank the Federal Trade Commission (FTC) for the opportunity to respond to this request for information (RFI).

Competition among industry players within cloud computing is intense. It is crucial, however, to remember that, as ubiquitous as cloud-service providers might be, they must compete not just with each other but also with the internal IT capabilities of large enterprises. In other words, while the cloud-computing sector has been growing in importance within the IT ecosystem, it remains just one aspect of that ecosystem. Traditional, on-premises IT infrastructure continues to hold sway within many businesses, with internal IT teams designing solutions uniquely tailored to the specific needs of their organizations.

In this context, cloud providers present an attractive proposition. They offer companies the opportunity to take advantage of gains from specialization to outsource some or all of their IT services to expert entities. This decision between outsourcing and maintaining in-house operations is a typical business consideration, and its outcome will vary depending on a particular company’s individual capabilities. Nonetheless, it is clear that the advent of cloud computing has significantly expanded the range of available IT options.

While both the fast-moving nature of the cloud-computing industry and its intense competition have catalyzed numerous benefits, there are also some reasons for concern. For example, the shortage of computer chips…

ICLE Amicus in En Banc Rehearing Before the 9th Circuit in Epic Games v Apple

INTEREST OF THE AMICUS CURIAE The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center aimed at building . . .

INTEREST OF THE AMICUS CURIAE

The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center aimed at building the intellectual foundations for sensible, economically grounded policy.  ICLE promotes the use of law and economics methodologies to inform policy debates and has longstanding expertise evaluating antitrust law and policy.

ICLE has an interest in ensuring that antitrust law promotes the public interest by remaining grounded in sensible rules informed by sound economic analysis.  That includes ensuring consistency between antitrust law and other laws that proscribe unfair methods of competition, such as California’s Unfair Competition Law.[1]

INTRODUCTION

The panel’s holdings that (1) Apple’s conduct with respect to its close control over the App Store and restrictions on in-app payments (“IAP”) do not give rise to an antitrust violation, but that (2) its anti-steering provisions nevertheless violate California’s Unfair Competition Law (“UCL”), are incongruent.  The anti-steering provisions violate the UCL only if they constitute an “incipient violation of an antitrust law, or . . . [cause harm] comparable to or the same as a violation of the law.”  Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 186-87 (1999).  But provisions limiting app developers’ ability to steer consumers to alternative payment options exist merely to further the goals of the lawful IAP restrictions, and thus the anti-steering provisions cannot constitute incipient antitrust violations or cause harm comparable to such violations.

Having affirmed the District Court’s finding that Apple’s…

ICLE Response to the AI Accountability Policy Request for Comment

I. Introduction: How Do You Solve a Problem Like ‘AI’? On behalf of the International Center for Law & Economics (ICLE), we thank the National . . .

I. Introduction: How Do You Solve a Problem Like ‘AI’?

On behalf of the International Center for Law & Economics (ICLE), we thank the National Telecommunications and Information Administration (NTIA) for the opportunity to respond to this AI Accountability Policy Request for Comment (RFC).

A significant challenge that emerges in discussions concerning accountability and regulation for artificial intelligence is the broad and often ambiguous definition of “AI” itself. This is demonstrated in the RFC’s framing:

This Request for Comment uses the terms AI, algorithmic, and automated decision systems without specifying any particular technical tool or process. It incorporates NIST’s definition of an ‘‘AI system,’’ as ‘‘an engineered or machine-based system that can, for a given set of objectives, generate outputs such as predictions, recommendations, or decisions influencing real or virtual environments.’’  This Request’s scope and use of the term ‘‘AI’’ also encompasses the broader set of technologies covered by the Blueprint: ‘‘automated systems’’ with ‘‘the potential to meaningfully impact the American public’s rights, opportunities, or access to critical resources or services.’’[1]

As stated, the RFC’s scope could be read to cover virtually all software.[2] But it is essential to acknowledge that, for the purposes of considering potential regulation, we lack a definition of AI that is either sufficiently broad as to cover all or even most areas of concern, and sufficiently focused as to be a useful lens for analysis. That is to say, what we think of as AI encompasses a significant diversity of discrete technologies that…

IN THE MEDIA

Dirk Auer on the EU’s Investigation of Google Ad Tech

Bloomberg – ICLE Director of Competition Policy Dirk Auer was quoted by Bloomberg in a story about the European Union’s investigation of Google’s ad tech business. . . .

Bloomberg – ICLE Director of Competition Policy Dirk Auer was quoted by Bloomberg in a story about the European Union’s investigation of Google’s ad tech business. You can read full piece here.

“The commission may feel emboldened by the fact that the DOJ is pursuing virtually the same lawsuit, but some might say this is more a case of folie à deux than a healthy working relationship,” said Dirk Auer, Director of Competition Policy at the International Center for Law & Economics.

“The legal obstacles to breaking up Google are tremendous,” he said. “The commission will have to show there was really no other way to solve the issues.”

Andrew Morriss on Eminent Domain

Fort Worth Star-Telegram – ICLE Academic Affiliate Andrew Morriss was quoted by the Fort Worth Star-Telegram in a story about the State of Texas’ use of . . .

Fort Worth Star-Telegram – ICLE Academic Affiliate Andrew Morriss was quoted by the Fort Worth Star-Telegram in a story about the State of Texas’ use of eminent domain to seize a developer’s 5,000-acre property. You can read full piece here.

Under eminent domain laws, entities including the state government can seize private property if it is for the public benefit. Andrew Morriss, a professor at Texas A&M’s School of Law and The Bush School of Government and Public Service, said that a state park is firmly within the scope of the public benefit.

“It’s like one of the obvious examples that are used in textbooks,” Morriss said. “Highways, parks, firehouses — that’s what eminent domain is for.”

…“The only thing he can argue with the state about is how much they have to pay him for the property,” Morriss said. “There’s no way he can stop them from taking the property.”

…Morriss, the A&M professor, said that the state is only required to pay a fair market price for Todd’s property. There may be some wiggle room for Todd to argue that he should also be reimbursed money that he’s invested into the property, or any money he spent to improve the property. But because Todd Interests purchased the land so recently, it’s already clear how much it’s worth on the market.

“The starting point for the discussion would be how much he paid,” Morriss said. “I think it’s very likely the state will pay him what he paid, possibly plus a little bit more to make up for expenses that he’s incurred.”

 

Dirk Auer on the DMA

RealClearMarkets – ICLE Director of Competition Policy Dirk Auer was cited in an op-ed at RealClearMarkets by David McGarry of the Taxpayers Protection Alliance about the . . .

RealClearMarkets – ICLE Director of Competition Policy Dirk Auer was cited in an op-ed at RealClearMarkets by David McGarry of the Taxpayers Protection Alliance about the European Union’s Digital Markets Act. You can read full piece here.

Moreover, despite the agitation of pro-DMA technocrats, self-preferencing often benefits large platforms’ small competitors. “Platforms that preference their own products frequently end up increasing the total market’s value by growing the share of users of a particular product,” writes Dirk Auer, director of competition policy at the International Center for Law & Economics. “Those that preference inferior products end up hurting their attractiveness to users of their ‘core’ product, exposing themselves to competition from rivals.”

Brian Albrecht on ‘Greedflation’

Fortune – ICLE Chief Economist Brian Albrecht was quoted by Fortune in a story about the degree to which rising corporate profits are to blame for . . .

Fortune – ICLE Chief Economist Brian Albrecht was quoted by Fortune in a story about the degree to which rising corporate profits are to blame for inflation. You can read full piece here.

“There’s a standard cyclical component to profits,” Brian Albrecht, chief economist at the International Center for Law & Economics, a non-profit, non-partisan research center, told Fortune.

Despite the jarring statistical incongruity, he said, “this is business as usual for the economy,” arguing that corporate profits are returning to trend, just like they typically do as business cycles mature. But to really understand why profits are falling you have to rewind to the brief but devastating recession caused by the pandemic just three years ago.

…Profits tend to rise as economies come out of recessions, according to Albrecht, because demand increases and supply can’t keep up. That, in turn, drives up prices and enables corporations to increase margins.

…Both Leer and Albrecht said they also believe profits will continue to sink this year, but not to the extent that many forecasters on Wall Street are claiming.“I think it would take a real mess-up from the Fed to get that kind of drop in profits,” Albrecht said, arguing that scenario is only likely if Fed officials decide to jack up rates dramatically from here.

…Both Leer and Albrecht, however, stand firmly against the Greedflation theory. They believe the rise of profits in 2020 and 2021 was purely a result of supply and demand imbalances in an economy that was flooded with fiscal and monetary stimulus while supply chains were fractured.

But, like Edwards, Albrecht noted that corporate profits’ sharp rise in late 2020 and 2021 could mean that the recent drop in profits is merely a return to trend, and a recession isn’t imminent.

“Very rapidly falling profits are a sign of recession, but I don’t know if this qualifies as that. You have to remember exactly how dramatic the profit rise was in 2020 and ‘21. So I’m not immediately concerned. They’re falling from that extreme peak. Maybe they’re just falling back to the normal business cycle setup,” he said.

ICLE on the Durbin Amendment

Payments Journal – ICLE was cited in Payments Journal in an article about the benefits realized from investments in the electronic payments industry. You can . . .

Payments Journal – ICLE was cited in Payments Journal in an article about the benefits realized from investments in the electronic payments industry. You can read the full piece here.

It is unfortunate, then, to see recent efforts by policymakers backed by big-box retailers to limit investment into the electronic payments industry, and in turn the technology that protects both consumers and small businesses, through the expansion of Dodd-Frank era price controls. For years, these global chains have insisted that these price caps benefit consumers with cheaper prices in stores. However, a 2017 report published by the International Center for Law and Economics detailed how price controls on debit card fees resulted in big box retailers saving approximately $40 billion. Furthermore, this cap has resulted in a massive transfer of income from consumers to retailers. In fact, according to a recently-conducted analysis using data from the Federal Reserve, since 2012, issuers have lost more than $90 billion in interchange revenue — including an estimated $14 billion in 2019 alone.

Andrew Morriss on Eminent Domain in Texas

Texas Tribune – ICLE Academic Affiliate Andrew Morriss was quoted in a story in the Texas Tribune in a story about the eminent-domain process in the . . .

Texas Tribune – ICLE Academic Affiliate Andrew Morriss was quoted in a story in the Texas Tribune in a story about the eminent-domain process in the State of Texas. You can read full piece here.

 

Brian Albrecht on Inflation

CNBC – ICLE Chief Economist Brian Albrecht was quoted by CNBC in a story about the effects of inflation on consumers. You can read full piece . . .

CNBC – ICLE Chief Economist Brian Albrecht was quoted by CNBC in a story about the effects of inflation on consumers. You can read full piece here.

Lower-income households also have fewer ways to reduce or change their spending habits and less in savings or investment accounts to fall back on, noted Brian Albrecht, chief economist at the International Center for Law and Economics.

“Inflation makes it hard to make decisions and think about the future, particularly for those with the fewest resources,” Albrecht said.

PRESENTATIONS & INTERVIEWS

Dirk Auer on the UK’s DMCC

ICLE Director of Competition Policy Dirk Auer took part in a virtual panel hosted by the Digital Markets Research Hub about the UK’s Digital Markets, . . .

ICLE Director of Competition Policy Dirk Auer took part in a virtual panel hosted by the Digital Markets Research Hub about the UK’s Digital Markets, Competition and Consumers Bill and how it compares to the EU’s Digital Markets Act. Tom Smith of Geradin Partners and Liza Lovdahl Gormsen of the British Institute for International and Comparative Law. The full video is embedded below.

Mikołaj Barczentewicz on Ireland’s Meta Fine

ICLE Senior Scholar Miko?aj Barczentewicz joined the Mobile Dev Memo podcast to discuss the Irish Data Protection Commission’s recent $1.3 billion levied against Meta over . . .

ICLE Senior Scholar Miko?aj Barczentewicz joined the Mobile Dev Memo podcast to discuss the Irish Data Protection Commission’s recent $1.3 billion levied against Meta over its transmission of EU resident data to the United States, and what the case means for the future of U.S.-EU data flows. The full episode is embedded below.

Gus Hurwitz on Children’s Online Privacy

ICLE Director of Law & Economics Programs Gus Hurwitz was a guest on The Cyberlaw Podcast to discuss the Federal Trade Commission’s (FTC) recent settlement with . . .

ICLE Director of Law & Economics Programs Gus Hurwitz was a guest on The Cyberlaw Podcast to discuss the Federal Trade Commission’s (FTC) recent settlement with Amazon of a claim regarding children’s privacy, as well as separate FTC efforts to rewrite its 2019 consent decree with Meta over children’s advertising and services.

Other topics included Amazon settling another FTC  complaint over security failings at its Ring doorbell operation; Microsoft losing a data protection case in Ireland; and whether automated tip suggestions should be condemned as “dark patterns.”

The full episode is embedded below.

SHORT FORM WRITTEN OUTPUT

The FTC Shouldn’t Try to Make Amazon Divest Its Logistics Service

Bloomberg reports that the Federal Trade Commission (FTC) plans a suit against Amazon to force the divestiture of the company’s logistics service. The suit, if correctly . . .

Bloomberg reports that the Federal Trade Commission (FTC) plans a suit against Amazon to force the divestiture of the company’s logistics service. The suit, if correctly described, would try and do through litigation what could not be achieved through legislation, when Congress did not enact the American Innovation and Choice Online Act (AICOA).

Read the full piece here.

The Paradoxical Perils of Mandatory ‘Competition’ in Merchant Routing of Credit-Card Transactions

Sen. Richard Durbin (D-Ill.) earlier this month introduced legislation that aims to manufacture competition in the routing of credit-card transactions. If enacted, the measure would require that . . .

Sen. Richard Durbin (D-Ill.) earlier this month introduced legislation that aims to manufacture competition in the routing of credit-card transactions. If enacted, the measure would require that merchants be able to choose from at least two networks when processing most credit-card transactions.

Read the full piece here.

Antitrust at the Agencies Roundup: You Will Absolutely Work in This Town Again Edition

Readers might recall my recent discussion of the Federal Trade Commission’s (FTC) new Bureau of Let’s Sue Meta, in which I covered, among other things, the . . .

Readers might recall my recent discussion of the Federal Trade Commission’s (FTC) new Bureau of Let’s Sue Meta, in which I covered, among other things, the commission’s proposal to modify its 2020 Decision and Order In the Matter of Facebook Inc. (now Meta). The 2020 order included complex behavioral requirements, in addition to a record-setting $5 billion penalty. One supposes that the consumer harm had been inestimable, given that the commission never did estimate it.

Read the full piece here.

How the Facebook Claim’s Intellectual Foundations Doomed Its Argument

The UK Competition Appeal Tribunal (CAT) recently handed down a judgment refusing to allow “the Facebook Claim”—among the more well-known UK competition-law class-action cases—to proceed . . .

The UK Competition Appeal Tribunal (CAT) recently handed down a judgment refusing to allow “the Facebook Claim”—among the more well-known UK competition-law class-action cases—to proceed to trial. While the case failed to receive the necessary certification, it may yet fight another day, provided that it undergoes, as the CAT put it, a “root and branch re-evaluation.”

Read the full piece here.

Even Meta Deserves the Rule of Law

In Robert Bolt’s play “A Man for All Seasons,” the character of Sir Thomas More argues at one point that he would “give the Devil . . .

In Robert Bolt’s play “A Man for All Seasons,” the character of Sir Thomas More argues at one point that he would “give the Devil benefit of law, for my own safety’s sake!” Defending the right to due process for a broadly disliked company is similarly not the most popular position, but nonetheless, even Meta deserves the rule of law.

Read the full piece here.

Leave the Golf Leagues Alone

After nearly two years of litigation and intense competition for the world’s top golfers, the PGA Tour and LIV Golf have agreed to create a . . .

After nearly two years of litigation and intense competition for the world’s top golfers, the PGA Tour and LIV Golf have agreed to create a new, as-yet-unnamed, for-profit joint entity. Most headlines about the deal have focused on the ethical and geopolitical problems that accompany the PGA’s joining forces with LIV’s sponsor, the Saudi Arabian Public Investment Fund. Within policy circles, the pseudo-merger has also stirred concerns regarding potential antitrust violations and harm to competition should the major golf leagues join forces as planned. The Justice Department (DOJ) has announced an investigation into the merger.

Read the full piece here.

The EU Might Just Break the Internet

Bad competition cases are a dime a dozen these days. The UK Competition and Markets Authority’s (CMA) recent unfortunate decisions to block both Microsoft’s acquisition of . . .

Bad competition cases are a dime a dozen these days. The UK Competition and Markets Authority’s (CMA) recent unfortunate decisions to block both Microsoft’s acquisition of Activision Blizzard and Meta’s takeover of Giphy spring to mind as examples of a competition enforcer prioritising populist “big is bad” concerns.

And yet, in the race to bring the most reckless competition case, the European Commission takes the crown, most recently accusing Google of abusing its dominant position in the online-advertising market. According to the competition watchdog, the issue is that Google favours its own ad exchange (i.e. a platform that matches advertisers with publisher websites) over rivals, thereby harming competition and consumers.

Read the full piece here.

NLRB Targeting of Noncompetes Lacks a Sound Legal Foundation

Jennifer Abruzzo, general counsel of the National Labor Relations Board (NLRB), recently issued a memo claiming that certain noncompete clauses in labor contracts are illegal, on grounds . . .

Jennifer Abruzzo, general counsel of the National Labor Relations Board (NLRB), recently issued a memo claiming that certain noncompete clauses in labor contracts are illegal, on grounds that they violate employees’ right to organize and negotiate better working conditions under Section 7 of the National Labor Relations Act (NLRA).

Read the full piece here.

Oregon Should Beware the Right to Repair

The Oregon State Legislature is considering HB 3631, a bill that would ensure that consumers have a “right to repair” their electronics devices. The legislation would . . .

The Oregon State Legislature is considering HB 3631, a bill that would ensure that consumers have a “right to repair” their electronics devices. The legislation would require that manufacturers provide consumers and independent repair shops access to relevant repair information, as well to make available any parts or tools necessary to carry out the repair.

Read the full piece here.

FTC v Amgen: The Economics of Bundled Discounts, Part Two

The Federal Trade Commission (FTC) recently announced that it would sue to block Amgen’s proposed $27.8 billion acquisition of Horizon Therapeutics. The challenge represents a . . .

The Federal Trade Commission (FTC) recently announced that it would sue to block Amgen’s proposed $27.8 billion acquisition of Horizon Therapeutics. The challenge represents a landmark in the history of pharmaceutical-industry antitrust enforcement, as the industry has largely been given license to engage in permissive mergers and acquisitions of smaller companies without challenge.

In Part One, I reviewed the basic structure and function of the pharmaceutical industry, as well as the theory of harm that the FTC is bringing. In this part, I take a much deeper dive into the economic literature to determine whether the FTC’s theory of harm is likely to hold up in court and whether the commission has picked the right forum in which to bring its claims.

Read the full piece here.

Antitrust Regulators Should Be Careful Not to Shank the PGA-LIV Deal

In a world in which so-called “Big Tech” has dominated antitrust discussions for a decade or more, who would’ve guessed that golf would grab the . . .

In a world in which so-called “Big Tech” has dominated antitrust discussions for a decade or more, who would’ve guessed that golf would grab the biggest headlines? The proposed merger of the PGA Tour and LIV Golf has some major headline-grabbing potential: sports, big money, big names, 9/11, human-rights abuses, and cringeworthy public-relations attempts.

Aside from those issues, the PGA-LIV link-up also presents some important issues for antitrust enforcers.

Read the full piece here.

Dynamic Competition Proves There Is No Captive Audience: 10 Years, 10G, and YouTube TV

In Susan Crawford’s 2013 book “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” the Harvard Law School professor argued that . . .

In Susan Crawford’s 2013 book “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” the Harvard Law School professor argued that the U.S. telecommunications industry had become dominated by a few powerful companies, leading to limited competition and negative consequences for consumers, especially for broadband internet.

Crawford’s ire was focused particularly on Comcast, AT&T, and Verizon, as she made the case that these three firms were essentially monopolies that had divided territories and set up roadblocks through mergers, vertical integration, and influence over regulators and franchisors to prevent competition and innovation. In particular, she noted the power Comcast commanded in securing access to live sports, allowing them to effectively prevent cord-cutting and limit competition from other cable companies.

According to Crawford, the consequences of this monopoly power were high prices for service, poor customer service, and limited access to high-speed internet in certain areas, particularly in rural and low-income communities. In effect, she saw no incentives for broadband companies to invest in high-speed and reliable internet. In response, she proposed increased competition and regulation, including the development of fiber-based municipal broadband to foster greater consumer choice, lower prices, and improved access to reliable internet service.

A decade later, the broadband market is far more dynamically competitive than critics like Crawford believed was possible. YouTube TV’s rights to NFL Sunday Ticket (as well as the massive amount of programming available online) suggests that Comcast did not have the control over important programming like live sports that would have enabled them to prevent cord-cutting or to limit competition. And the rise of 10G broadband also suggests that there is much more competition in the broadband market than Crawford believed was possible, as her “future proof” goal of symmetrical 1Gb Internet will soon be slower than what the market actually provides.

Read the full piece here.

FTC v Amgen: The Economics of Bundled Discounts, Part One

The Federal Trade Commission (FTC) recently announced that it would seek to block Amgen’s proposed $27.8 billion acquisition of Horizon Therapeutics. The move was the culmination of . . .

The Federal Trade Commission (FTC) recently announced that it would seek to block Amgen’s proposed $27.8 billion acquisition of Horizon Therapeutics. The move was the culmination of several years’ worth of increased scrutiny from both Congress and the FTC into antitrust issues in the biopharmaceutical industry. While the FTC’s move didn’t elicit much public comment, it raised considerable alarm in various corners of the biopharmaceutical industry—specifically, that it would chill beneficial biopharmaceutical M&A activity.

This piece, which aims to shed light on the FTC’s theory of the harm in the case and its consequences for the industry, will be divided into two parts. This first post will discuss the overall biopharmaceutical market and the FTC’s stated theory of harm. In a subsequent post, I will dive more deeply into the economic theories that underpin the case and the risk-benefit tradeoff inherent in the FTCs decision to challenge the merger.

Read the full piece here.

The Robinson-Patman Act: The Anti-Consumer Welfare Statute

Consistent with the neo-Brandeisian penchant for downplaying (some would say ignoring) consumer-welfare concerns, the Federal Trade Commission (FTC) recently touted its interest in “reinvigorating” enforcement of the Robinson-Patman . . .

Consistent with the neo-Brandeisian penchant for downplaying (some would say ignoring) consumer-welfare concerns, the Federal Trade Commission (FTC) recently touted its interest in “reinvigorating” enforcement of the Robinson-Patman Act (RPA). This would stand sensible antitrust-enforcement policy on its head, by devoting resources to actions that predictably would tend to diminish consumer welfare.

Read the full piece here.

What’s an Agency to Do? That’s for Congress to Say

While persistent gridlock continues to bedevil Congress, federal agencies have been busy pushing the boundaries of their authority. The Federal Trade Commission (FTC) is trying . . .

While persistent gridlock continues to bedevil Congress, federal agencies have been busy pushing the boundaries of their authority. The Federal Trade Commission (FTC) is trying to ban noncompete agreements. The Securities and Exchange Commission (SEC) is puzzling over cryptocurrencies. The Environmental Protection Agency (EPA) is pushing regulations to address climate change.

At the same time, the U.S. Supreme Court is telling agencies that they cannot act without clear congressional authority. What’s an agency to do? The answer is disarmingly simple: nothing, until Congress clearly directs them otherwise.

Read the full piece here.

There’s Nothing ‘Fair’ About EU Telecoms’ Proposed ‘Fair Share’ Plan

The European Commission’s recently concluded consultation on “the future of the electronic communications sector and its infrastructure” was a curious phenomenon in which the commission . . .

The European Commission’s recently concluded consultation on “the future of the electronic communications sector and its infrastructure” was a curious phenomenon in which the commission revived the seemingly dead-and-buried idea of a legally mandated “sender pays” network-traffic scheme, despite the fact that it remains as unpopular and discredited as it was when last discussed roughly a decade ago.

Read the full piece here.

Senate Should Press Biden FCC Nominee on Rate Regulation

President Joe Biden’s big plans for the Federal Communications Commission, including the reimposition of so-called “net neutrality” rules that were rolled back during the Trump . . .

President Joe Biden’s big plans for the Federal Communications Commission, including the reimposition of so-called “net neutrality” rules that were rolled back during the Trump years, may finally move forward if the U.S. Senate agrees to confirm Biden’s recent nominee Anna Gomez to be the commission’s fifth member and decisive vote.

A history of support for net neutrality was one of the things that ultimately doomed the confirmation prospects for prior nominee Gigi Sohn, who withdrew her name in February, 16 months after Biden originally nominated her. Senators are sure to press Gomez for her thoughts on the same issue, as they should, but it’s not the only matter deserving of scrutiny. As policymakers continue to explore ways to expand affordable internet access, they should also determine where Gomez stands on the key issue of rate regulation.

Read the full piece here.

Antitrust at the Agencies Roundup: Pruning the Data Tree Edition

In my last roundup, I puzzled over the Federal Trade Commission’s (FTC) suit to block Amgen’s acquisition of Horizon Therapeutics. The deal involved no product overlaps . . .

In my last roundup, I puzzled over the Federal Trade Commission’s (FTC) suit to block Amgen’s acquisition of Horizon Therapeutics. The deal involved no product overlaps whatsoever (i.e., no horizontal competition), a target firm acknowledged to have no competitors for the orphan drugs at issue, and nobody poised to enter into competition either.

I won’t recapitulate the details of my confusion here, but I will point to a new piece by Bill MacLeod (a past chair of the American Bar Association’s Antitrust Section and a former FTC bureau director) and David Evans, in which they raise an issue I didn’t cover: “The Federal Trade Commission may have filed the first merger complaint in a generation that could be dismissed for failure to state a claim.” Which would not look good.

Read the full piece here.

To Infinity and Beyond: The New Broadband Map Has Landed!

Announced with the sort of breathless press release one might expect for the launch of a new product like Waystar Royco’s Living+, the Federal Communications Commission . . .

Announced with the sort of breathless press release one might expect for the launch of a new product like Waystar Royco’s Living+, the Federal Communications Commission (FCC) has gone into full-blown spin mode over its latest broadband map.

This is, to be clear, the map that the National Telecommunications and Information Administration (NTIA) will use to allocate $42.5 billion to states from NTIA’s Broadband Equity, Access, and Deployment (BEAD) program. Specific allocations are expected to be announced by June 30.

Read the full piece here.

Ireland’s Massive Fine Against Meta Could Erode Trust In EU Law

The €1.2 billion fine that the Irish Data Protection Commission (DPC) against Meta marks a new record for violation of the EU’s General Data Protection . . .

The €1.2 billion fine that the Irish Data Protection Commission (DPC) against Meta marks a new record for violation of the EU’s General Data Protection Regulation (GDPR), but it is the DPC’s order that the company to shut off its transatlantic flow of user data that will have the most far-reaching consequences for international trade, privacy policy, and the rule of law.

Read the full piece here.

ISSUE BRIEFS

German Big Tech Actions Undermine the DMA

The complexity of the European Union’s Digital Markets Act (DMA) raises various difficult interpretative questions. Chief among them is whether the EU law is . . .

Abstract

The complexity of the European Union’s Digital Markets Act (DMA) raises various difficult interpretative questions. Chief among them is whether the EU law is effective in achieving its purpose of harmonizing the national laws of EU member states. The issue is not just of academic concern; if the DMA falls short in this regard, it could be viewed as having been founded on flawed legal grounds, potentially rendering it null and void. In this context, we examine recent actions by the German Federal Cartel Office (Bundeskartellamt; FCO) regarding large technology-sector firms that the DMA would regulate as “gatekeepers.” This issue brief outlines two competing legal interpretations of potential relevance. One option is that the FCO’s actions may contravene EU law. Alternatively, the recent German actions could indicate that the DMA fails in its purpose as a harmonizing measure, thereby casting doubts on the law’s validity.

I. The DMA Must Be a Harmonizing Measure

Every law enacted by the EU legislature must have a legal basis in the EU treaties. Without an appropriate treaty basis, the law would be invalid. The DMA’s drafters chose Article 114 of the Treaty on the Functioning of the European Union (TFEU) as its legal basis. Notably, unlike Article 352 TFEU, Article 114 does not require unanimity among EU member states for a law to be enacted. Because the provision has a lower threshold of member-state consent, it is more limited in its scope.

Article 114 TFEU allows adoption of “the measures for…

AMICUS BRIEFS

ICLE Amicus in En Banc Rehearing Before the 9th Circuit in Epic Games v Apple

INTEREST OF THE AMICUS CURIAE The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center aimed at building . . .

INTEREST OF THE AMICUS CURIAE

The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center aimed at building the intellectual foundations for sensible, economically grounded policy.  ICLE promotes the use of law and economics methodologies to inform policy debates and has longstanding expertise evaluating antitrust law and policy.

ICLE has an interest in ensuring that antitrust law promotes the public interest by remaining grounded in sensible rules informed by sound economic analysis.  That includes ensuring consistency between antitrust law and other laws that proscribe unfair methods of competition, such as California’s Unfair Competition Law.[1]

INTRODUCTION

The panel’s holdings that (1) Apple’s conduct with respect to its close control over the App Store and restrictions on in-app payments (“IAP”) do not give rise to an antitrust violation, but that (2) its anti-steering provisions nevertheless violate California’s Unfair Competition Law (“UCL”), are incongruent.  The anti-steering provisions violate the UCL only if they constitute an “incipient violation of an antitrust law, or . . . [cause harm] comparable to or the same as a violation of the law.”  Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 186-87 (1999).  But provisions limiting app developers’ ability to steer consumers to alternative payment options exist merely to further the goals of the lawful IAP restrictions, and thus the anti-steering provisions cannot constitute incipient antitrust violations or cause harm comparable to such violations.

Having affirmed the District Court’s finding that Apple’s…

ICLE Amicus in Carr v Google

INTEREST OF AMICUS CURIAE The International Center for Law & Economics (“ICLE”) is a nonprofit, nonpartisan, global research and policy center committed to developing the . . .

INTEREST OF AMICUS CURIAE

The International Center for Law & Economics (“ICLE”) is a nonprofit, nonpartisan, global research and policy center committed to developing the intellectual foundations for sensible, economically grounded policy.  ICLE promotes the use of law and economics methodologies, and economic findings, to inform public policy, and has longstanding expertise in antitrust law.

ICLE has an interest in ensuring that antitrust law promotes the public interest and consumer welfare by remaining grounded in sensible rules informed by sound economic analysis.  This includes ensuring that courts and agencies correctly apply the standards for class certification in antitrust cases involving two-sided transaction platforms.[1]

Amicus is authorized to file this brief by Fed. R. App. P. 29(a)(2) because all parties have consented to its filing.

RULE 29(a)(4)(e) STATEMENT

Amicus hereby states that no party’s counsel authored this brief in whole or in part; that no party or party’s counsel contributed money that was intended to fund the preparation or submission of the brief; and that no person other than amicus or its counsel contributed money that was intended to fund the preparation or submission of the brief.

INTRODUCTION AND SUMMARY OF ARGUMENT

The aim of the federal antitrust laws is to protect competition and the innovation and value-creation that it fosters.  To that end, a wide range of entities are authorized to prosecute antitrust claims provided they meet the standards that the legislature and courts have articulated to prevent over-enforcement,…

ICLE Amicus Brief in Illumina & Grail v FTC

IDENTITY AND INTEREST OF AMICUS CURIAE AND SOURCE OF AUTHORITY TO FILE BRIEF The International Center for Law & Economics (“ICLE”) is a nonprofit, nonpartisan, . . .

IDENTITY AND INTEREST OF AMICUS CURIAE AND SOURCE OF AUTHORITY TO FILE BRIEF

The International Center for Law & Economics (“ICLE”) is a nonprofit, nonpartisan, global research and policy center aimed at building the intellectual foundations for sensible, economically grounded policy. ICLE promotes the use of law and economics methodologies, and economic findings, to inform public policy, and has longstanding expertise in antitrust law.

Amici also include 28 scholars of antitrust, law, and economics at leading universities and research institutions across the United States. Their names, titles, and academic affiliations are listed in Appendix A. All amici have extensive expertise in antitrust law and economics, and several served in senior positions at the Federal Trade Commission or the Antitrust Division of the Department of Justice.

Amici have an interest in ensuring that courts and agencies correctly apply the standards for evaluating horizontal and vertical mergers, and take into account the benefits commonly associated with vertical mergers.        

Amici are authorized to file this brief by Fed. R. App. P. 29(a)(2) because all parties have consented to its filing.

RULE 29(a)(4)(e) STATEMENT

Amici hereby state that no party’s counsel authored this brief in whole or in part; that no party or party’s counsel contributed money that was intended to fund the preparation or submission of the brief; and that no person other than amicus or its counsel contributed money that was intended to fund the preparation or submission of the brief.

INTRODUCTION AND SUMMARY…

COMMENTS & STATEMENTS

TechFreedom Letter Re: FTC’s Proposed Negative Option Rule

We write to express our concerns about two aspects of the proposed rule that would, as drafted, disrupt the careful balance Congress struck in crafting . . .

We write to express our concerns about two aspects of the proposed rule that would, as drafted, disrupt the careful balance Congress struck in crafting the Federal Trade Commission Act. If the FTC is to have the authority to impose civil penalties for ordinary misrepresentations, even for certain classes of transactions, only Congress can confer that power—and only by amending the Act.

Automatic renewals are nothing new, even if some consumers may find them surprising. How companies implement such “negative option” offerings may sometimes be unfair or deceptive. That’s why Congress enacted the Restore Online Shoppers’ Confidence Act.[1] A new rulemaking to consolidate existing rules on negative option marketing may well be appropriate. Unfortunately, “[t]he scope of the proposed Rule is not confined to negative option marketing,” as former Commissioner Christine Wilson warned in her dissent from the issuance of the proposed amendment: “It also covers any misrepresentation made about the underlying good or service sold with a negative option feature.”[2]

The proposed rule thus presents a great many companies with a difficult choice: abandon negative option marketing altogether, or risk incurring civil penalties not only for the negative option marketing itself, but also for “any material fact related to the underlying good or service.”[3] As former Commissioner Wilson noted, “even if the negative option terms are clearly described, informed consent is obtained, and cancellation is simple,”[4] the FTC could—for the first time—obtain civil penalties for claims involving product efficacy, national origin, how information about the consumer…

ICLE Response to the FTC’s Cloud Computing RFI

Introduction The cloud-computing industry has undergone a transformation in recent years, driven by innovation, competition, and unprecedented demand for information-technology (IT) services. These comments assess . . .

Introduction

The cloud-computing industry has undergone a transformation in recent years, driven by innovation, competition, and unprecedented demand for information-technology (IT) services. These comments assess the state of competition in this burgeoning field, and we thank the Federal Trade Commission (FTC) for the opportunity to respond to this request for information (RFI).

Competition among industry players within cloud computing is intense. It is crucial, however, to remember that, as ubiquitous as cloud-service providers might be, they must compete not just with each other but also with the internal IT capabilities of large enterprises. In other words, while the cloud-computing sector has been growing in importance within the IT ecosystem, it remains just one aspect of that ecosystem. Traditional, on-premises IT infrastructure continues to hold sway within many businesses, with internal IT teams designing solutions uniquely tailored to the specific needs of their organizations.

In this context, cloud providers present an attractive proposition. They offer companies the opportunity to take advantage of gains from specialization to outsource some or all of their IT services to expert entities. This decision between outsourcing and maintaining in-house operations is a typical business consideration, and its outcome will vary depending on a particular company’s individual capabilities. Nonetheless, it is clear that the advent of cloud computing has significantly expanded the range of available IT options.

While both the fast-moving nature of the cloud-computing industry and its intense competition have catalyzed numerous benefits, there are also some reasons for concern. For example, the shortage of computer chips…

ICLE Response to the AI Accountability Policy Request for Comment

I. Introduction: How Do You Solve a Problem Like ‘AI’? On behalf of the International Center for Law & Economics (ICLE), we thank the National . . .

I. Introduction: How Do You Solve a Problem Like ‘AI’?

On behalf of the International Center for Law & Economics (ICLE), we thank the National Telecommunications and Information Administration (NTIA) for the opportunity to respond to this AI Accountability Policy Request for Comment (RFC).

A significant challenge that emerges in discussions concerning accountability and regulation for artificial intelligence is the broad and often ambiguous definition of “AI” itself. This is demonstrated in the RFC’s framing:

This Request for Comment uses the terms AI, algorithmic, and automated decision systems without specifying any particular technical tool or process. It incorporates NIST’s definition of an ‘‘AI system,’’ as ‘‘an engineered or machine-based system that can, for a given set of objectives, generate outputs such as predictions, recommendations, or decisions influencing real or virtual environments.’’  This Request’s scope and use of the term ‘‘AI’’ also encompasses the broader set of technologies covered by the Blueprint: ‘‘automated systems’’ with ‘‘the potential to meaningfully impact the American public’s rights, opportunities, or access to critical resources or services.’’[1]

As stated, the RFC’s scope could be read to cover virtually all software.[2] But it is essential to acknowledge that, for the purposes of considering potential regulation, we lack a definition of AI that is either sufficiently broad as to cover all or even most areas of concern, and sufficiently focused as to be a useful lens for analysis. That is to say, what we think of as AI encompasses a significant diversity of discrete technologies that…

Testimony to the Senate Commerce Committee on Protecting Consumers from Junk Fees

Chairman Hickenlooper, Ranking Member Blackburn, and Members of the Committee: I am Todd Zywicki and it is a pleasure to appear before you today to . . .

Chairman Hickenlooper, Ranking Member Blackburn, and Members of the Committee:

I am Todd Zywicki and it is a pleasure to appear before you today to testify on the topic of “Protecting Consumers from Junk Fees.” I am George Mason University Foundation Professor at Antonin Scalia Law School and Research Fellow of the Law & Economics Center. From 2020-2021 I served as the Chair of the CFPB’s Taskforce on Consumer Financial Law and from 2003-2004 I served as the Director of the Office of Policy Planning at the Federal Trade Commission. I am also co-author of Consumer Credit and the American Economy (Oxford 2014) and have written and spoken extensively on issues of consumer protection generally and consumer financial protection specifically. I appear voluntarily today in my personal capacity and do not speak on behalf or represent any other party.

I share the frustration that many consumers hold today regarding the proliferation of seemingly ubiquitous add-on fees that we experience constantly, from surcharges for using our credit cards at a merchant, to hotel “resort fees,” and others. And earlier this year I experienced exactly this frustration when I checked into a hotel on vacation and was assessed a mandatory $30 a day “resort fee” that was only disclosed in fine print on the last screen of a multi-page checkout process at an Internet hotel booking website.

Buying a ticket to concert has in fact become a tedious process of searching for a concert or sports ticket and then having to spend 10 minutes clicking through multiple…

LONG FORM WRITING

Restoring the Rule of Law in Finance

The unraveling of the rule of law in finance is inherent in the system’s discretionary process of regulation. Each financial crisis begets new regulations and . . .

The unraveling of the rule of law in finance is inherent in the system’s discretionary process of regulation. Each financial crisis begets new regulations and new regulatory agencies with more expansive and discretionary powers. The general entanglement of finance, leftist interest groups, and the federal regulatory apparatus has created a threat to freedom that is almost unique in history. Leftist activists, “woke” corporations, and regulators and politicians have recognized and acted on the opportunity to use the financial regulatory system both to enact preferred policies through anti-democratic means and to silence their ideological opponents. As governmental power grows, the threat of its misuse grows…

ICLE ON SOCIAL MEDIA

June Threads

Threads from ICLE scholars on trending issues for the month of June 2023.

Threads from ICLE scholars on trending issues for the month of June 2023.