Antitrust Writing Awards (and a bit of self promotion)

This week, due to technical issues (and a bank holiday in France), I am unable to circulate any reviews. However, I would like to refer you to the papers selected by Concurrences for the Antitrust Writing Awards 2021 – they cover virtually all of current antitrust debates, and are typically very good. I say typically because I have a paper of my own nominated, and that may lower the level a bit – ‘The three body problem – Extraterritoriality, comity and cooperation in competition law‘, to be published in a coming book. I would of course appreciate it if you could vote for it, but, more importantly, this is a good occasion to suggest you may want to read it. All comments are welcome. And if anyone detects the science fiction reference, you have my respect. You can find the paper here. The abstract is as follows: Understanding the extraterritorial effect of competition law raises challenges akin to the three…

Alexandre de Streel and Pierre Larrouche on ‘The integration of wide and narrow market investigations in EU economic law’ in Motta, Peitz, Schweitzer (eds) Market Investigations: A New Competition Tool for Europe? (Cambridge University Press, 2021) Chapter 4

In 2020, the European Commission embarked on a major reflection and consultation exercise aimed at adapting EU economic law to contemporary challenges, in particular to the competition issues raised by the deployment of digital technologies. One option that was considered was the adoption of a New Competition Tool to deal with structural competition problems which could not be addressed adequately by existing instruments. Two main models were considered: a wide version, applicable to all sectors of the economy, similar to market studies; and a narrow version applicable to the digital sector (or platforms) only. In December 2020, the Commission opted for the narrow version in its proposal for a Digital Markets Act (DMA), a sector-specific instrument applicable to “gatekeepers” of “core platform services”, which includes three types of what is termed “market investigation”. This chapter analyses how to integrate both types of market studies/investigations within EU economic law. Section II deals with the characteristics of competition law and sectoral regulation…

Heike Schweitzer on ‘The Art to Make Gatekeeper Positions Contestable and the Challenge to Know What is Fair: A Discussion of the Digital Markets Act Proposal’ (Forthcoming, ZEuP, 2021, Issue 3)

Legislators around the world are currently struggling to adequately respond to the new risks that accompany innovative platform-based and data-driven business models. These risks include many problems of economic power – the traditional subject of competition law. However, according to a widely shared perception, a case-by-case enforcement of competition rules will not suffice. This triggered a number of studies, leading ultimately to the adoption of a number of legislative proposals. These include the EU’s Digital Markets Act (DMA) proposal to regulate digital gatekeepers; Germany’s reform of its competition law to endow the Bundeskartellamt with the competence to impose special rules of conduct on undertakings which have been found to be of paramount cross-market significance; and the regulatory regime for digital platforms with strategic market status recently proposed by the UK Digital Markets Taskforce. On the surface, much of the debate appears to be about legislative technique. Just beneath the surface, fundamental conceptual questions lurk. The most prominent among these questions…

Simonetta Vezzoso ‘Competition Policy in Transition: Exploring Data Portability’s Roles’ (2021) Journal of European Competition Law & Practice 12(5)

Several reform proposals circulated in the last two years recognise that data portability should play an increasingly important role in the digital economy. This paper, available here, explores data portability from an EU competition policy perspective. It points out that data portability can play three distinct roles, namely: (i) enabling switching, (ii) enabling data fluidity (iii) enhancing consumer empowerment and data sovereignty. These different roles are analysed against the background of (a) traditional competition law, (b) a market investigation regime, and (c) an ex-ante regulatory framework targeting large online platforms with gatekeeping power. Section II looks at the regulation of data portability, particularly non-personal data. Data can be either personal or non-personal. Personal data portability is a right under the GDPR. The data portability of non-personal data is foreseen by the EU Regulation on the Free Flow of Non-Personal Data in the European Union (Free Flow Regulation, or FFNPDR, in the following), which entered into force in May 2019. Besides…

Francisco Beneke and Mark-Oliver Mackenrodt on ‘Remedies for algorithmic tacit collusion’ (2021) Journal of Antitrust Enforcement 9 152

There is growing evidence that tacit collusion can be autonomously achieved by machine learning technology. However, outlawing such conduct is pointless unless there are suitable remedies to address them. This article, available here, explores how fines, and structural and behavioural remedies, can serve to discourage collusive outcomes while preserving incentives to use efficiency-enhancing algorithms. Section II provides a brief overview of the properties of deep learning methods and their applications to pricing decisions. Different machine learning methods can be usefully deployed to make pricing decisions. Reflecting statistical analysis, machine learning has the ability to automate pricing decisions by using hundreds or thousands of variables in ways that would be otherwise unavailable to market participants. Reinforcement learning may allow firms to automate pricing strategies according to variables such as reactions by competitors and the impact this has on profits or market share. As an algorithm’s problem-solving capabilities improve, market prices will tend to become more stable and converge to a price…

Frederic Jenny ‘Changing the way we think: competition, platforms and ecosystems’ (2021) Journal of Antitrust Enforcement 9 1

Firms are supposed to operate on predefined markets for goods or services where they compete against similar firms that offer substitutable products or services. All economic agents are assumed to be profit-maximisers that will not sell below average variable costs. However, this is not how the digital economy operates. As a result, many of the traditional tools used by competition authorities to assess relevant markets, or the intensity of competition between firms, are difficult to use or inadequate to assess competition issues between ecosystems in the digital world. Further economic thinking, and an understanding of the business models of digital ecosystems, are needed to allow competition authorities to make informed decisions about competition on digital markets. This article, available here, reviews some of the challenges competition agencies face. Section 2 looks at digital markets. Digital markets differ from traditional markets in a number of ways. The digital world has low costs and no-distance, which means that the delivery of services…

Mark Lemley ‘The Contradictions of Platform Regulation’ (2021)

Everyone wants to regulate the big tech companies. Efforts to rein in big tech represent a confluence of many different factors, but most of all reflect the outsized influence these companies have come to have on almost all aspects of our lives. However, the political consensus around regulating the tech industry is illusory. While everyone wants to regulate big tech, it turns out that they want to do so in very different, indeed contradictory, ways. This paper, available here, identifies some of the contradictions of platform regulation, their implications, and whether there is a way forward. Part I explores the contradictions of platform regulation proposals. Everyone may want to regulate big tech, but there is no agreement on what government should require big tech to do (or forbid big tech from doing). Some proposals are plainly contradictory. For example, there are widespread proposals to make internet platforms responsible for content posted on them – but while some want to encourage…

Rob Nicholls on ‘Regtech as an antitrust enforcement tool’ (2021) Journal of Antitrust Enforcement 9 135

In its simplest form, Regtech can be described as ‘the use of technology, particularly information technology, in the context of regulatory monitoring, reporting and compliance’ enabling it to provide ‘technological solutions to regulatory processes’. Regulatory technology (Regtech) has emerged mainly in financial services as a tool for regulatory compliance. However, to define Regtech as a sub-set of Fintech fails to properly explain its capabilities. Since Regtech has the potential for continuous monitoring capacity with close to real-time insights of domestic and global markets through artificial intelligence filters, it can be proactive rather than reactive, looking to identify problems in advance rather than after the fact. Research on Regtech and competition law has thus far considered how Regtech could be used by competition authorities to monitor compliance with relevant laws and regulations has been explored using statistical approaches (particularly in respect of cartels) and—to a more limited extent—using machine learning. This article, available here, explores an approach to applying Regtech techniques…

Thibault Schrephel ‘Computational Antitrust: An Introduction and Research Agenda Stanford Computational Antitrust’(2021)

In the last decade, antitrust agencies have shifted their focus to deal with issues arising in the digital economy. While there are passionate discussions about the competitive effects of business practices implemented by digital players, the use of technological tools to address such practices remains very little debated. This disconnect between diagnosis and treatment is becoming problematic, as antitrust agencies struggle to remedy anticompetitive practices in increasingly complex and fast-paced markets. The present article, available here, pursues three goals. First, it introduces computational antitrust – a new domain of legal informatics which seeks to develop computational methods for the automation of antitrust procedures and the improvement of antitrust analysis. Second, it explores how agencies, policymakers, and market participants can benefit from computational antitrust. Lastly, it sets out a research agenda for the years ahead Section I explains what is computational antitrust. Computational law is a “branch of legal informatics concerned with the mechanisation of legal analysis (whether done by humans…

Elena Argentesi, Paolo Buccirossi, Emilio Calvano, Tomaso Duso, Alessia Marrazzo and Salvatore Nava ‘Merger Policy in Digital Markets: An Ex Post Assessment’ (2021) Journal of Competition Law & Economics 17(1) 95

This paper, available here, presents a broad retrospective evaluation of mergers and merger decisions in markets dominated by multisided digital platforms. It identifies almost 300 acquisitions carried out by three major tech companies— Amazon, Facebook, and Google—between 2008 and 2018, looks at the business logic behind these transactions, and explores the theories of harm that have been used or, alternatively, could have been formulated by authorities. The paper then retrospectively examines two important merger cases, Facebook/Instagram and Google/Waze, providing a systematic assessment of the theories of harm considered by the UK competition authority, as well as evidence on the evolution of the market after the transactions were approved. Section II looks at the wealth of mergers and acquisitions (M&A) carried out by key digital platforms between 2008 and 2018. Companies active in digital markets are remarkably active in M&A, constantly seeking out interesting start-ups and purchasing them. Between 2008 and 2018, Google acquired 168 companies, Facebook acquired 71 companies, and…