Magali Eben and Viktoria Robertson ‘The Relevant Market Concept in Competition Law and Its Application to Digital Markets: A Comparative Analysis of the EU, US, and Brazil’ (2021) Graz Law Working Paper No 01-2021

Market definition is a core analytical tool that helps in the assessment of anti-competitive agreements, unilateral conduct and mergers. However, the difficulty of delineating a relevant market with the required predictability in digital markets has led some to question whether market definition can continue to fulfil its traditional functions in these dynamic market environments. The present contribution, available here, first surveys the general approach to market delineation in the EU, the US and Brazil. Against this background, it then embarks on a discussion of market definition in digital markets in each of these jurisdictions, with a particular focus on multi-sided markets, zero-price services and the concept of digital ecosystems. Section 2 surveys the general approach to market delineation in the EU, US and Brazil. The main parameters of market definition are strikingly similar in the EU, the US and Brazil. All these competition laws heavily rely on the relevant market as an analytical tool. However, while market definition is mainly…

Herbert Hovenkamp ‘Digital Cluster Markets’ (2021)

Many antitrust violations require proof of market power. Historically, the way antitrust litigants and courts have estimated power is by determining a market share of a properly defined “relevant market” of substitutable products. However, many firms sell more than a single product and, frequently, sell non-competing products. The possibility of aggregating noncompeting products or services leads to the creation of “cluster markets” consisting of noncompeting goods. Antitrust claims are often made regarding such clusters. It then becomes important to ask when it is sensible to locate power in the cluster itself, rather than in the simple presence of any particular item. This paper, available here, argues that clustering noncompeting products into a single market for purposes of antitrust analysis can be valuable, provided that the limitations of such an approach are understood. Clustering contributes to market power only when it is found, cumulatively, that: (1) many customers need or at least prefer the convenience of receiving the defendant’s grouping of…

Herbert Hovenkamp ‘Antitrust and Platform Monopoly’ (2021) 130 Yale L.J

Should antitrust policy do more to promote competition in digital platform markets? Is antitrust law sufficient to address competition problems in digital platforms, or are those problems so common and widespread that they require more pervasive public control? This article, available here, argues that sustainable competition in platform markets is possible, and that the individualised approach of the antitrust laws is better for consumers and most other affected interest groups than more intrusive regulation. Antitrust intervention will be less likely to reduce product or service quality, limit innovation, or reduce output than other regulatory alternatives. To achieve these outcomes, antitrust law needs to treat digital platform markets for what they are: markets that have some unique characteristics, but markets nonetheless. As a result, for the most part competition problems in them can be controlled with the antitrust tools we have. Section I considers digital platform monopoly. Antitrust policy is concerned with exercises of market power. The power question for digital…

Christopher Yoo on ‘Unpacking Data Portability’ (2020) Competition Policy International

Data portability has become a hot topic in competition law. Legislators and enforcement officials around the world have shown increasing interest in data portability as a competition law remedy. Although some commentators have suggested that data portability represents low hanging fruit compared with more complex remedies such as interoperability, the debate about how to implement any such mandate remains underdeveloped. This paper, available here, argues that data portability is not a panacea, and that enforcement officials will have to engage in the type of nuanced, fact-specific determinations that characterise classic antitrust analysis. Section 2 points out that not all data are created equal. To date, discussions have largely treated data as a monolithic phenomenon without drawing any distinctions among particular types of data and their different uses. Although advocacy rhetoric tends to talk about “big” data, the trade press repeatedly emphasises that size is not the only thing that matters. The most famous formulation claims that data consists of three…

Keith N. Hylton ‘Oligopoly Pricing and Richard Posner’ (2018) Antitrust Source

Oligopoly pricing cases are sometimes called “circumstantial-evidence conspiracies”, because they typically involve a charge of conspiracy and an absence of direct evidence of agreement.  What makes these cases special, however, is the type of circumstantial evidence brought to court, such as that of parallel behaviour, and the difficulty of determining whether the evidence justifies a finding of conspiracy. Over nearly 50 years, Richard Posner’s ideas have loomed large over the subject of oligopoly pricing and antitrust. However, by 2015 his approach seemed to have little to do with his ideas in 1969. This paper, , available here, explores this evolution, and how it reflects changes in how we think about oligopoly and collusion. Section I discusses the text messaging litigation and the reasoning behind Posner’s changing approach to oligopoly pricing. In 2015, judge Posner wrote the opinion In re Text Messaging. The case arose from the consolidation of several class actions accusing major wireless network providers (T-Mobile USA Inc., Sprint…

Howard Shelanski ‘Antitrust and Deregulation’ (2019) Yale Law Journal 127 1922

The relationship between antitrust enforcement and regulation depends on policy choices which must answer a question: how should antitrust enforcement and regulation relate to each other? This paper, which is available here, looks at this question in the context of deregulated industries. It argues that antitrust enforcement should run countercyclical to regulation, especially during strongly deregulatory cycles. The comparative importance of countering deregulatory shifts arises because, while increased regulation can keep antitrust enforcement out of regulated markets, reduced regulation triggers no such mechanism for pushing antitrust back into deregulated markets. It is argued that good reasons for antitrust enforcement to run counter to deregulation can be found in economics, legal doctrine, and current debates over competition policy. Part I discusses why deregulation can lead to enforcement gaps. A variety of institutions can govern economic competition. Decentralised, capitalist economies generally rely on markets to provide the incentives and discipline necessary to keep prices low, output high, and innovation moving forward. When…

Einer Elhauge ‘How Horizontal Shareholding Harms Our Economy—And Why Antitrust Law Can Fix It’ (2020) 10 Harvard Business Law Review 10(2) 207

This article, available here, argues that new economic proofs and empirical evidence show that horizontal shareholding in concentrated markets often has anticompetitive effect. The piece also develops new legal theories for tackling the problem of horizontal shareholding. When horizontal shareholding has anticompetitive effects, it is illegal not only under Clayton Act §7, but also under Sherman Act §1. Anticompetitive horizontal shareholding also constitutes an illegal agreement or concerted practice under EU Treaty Article 101, as well as an abuse of collective dominance under Article 102. Part I describes how new proofs and empirical evidence have confirmed that high levels of horizontal shareholding in concentrated product markets can have anticompetitive effects, even when each individual horizontal shareholder has a minority stake. The last few years have seen a deluge of studies – involving economic modelling and empirical research – demonstrating how overlapping horizontal shareholding can lead to anticompetitive effect, even when each individual horizontal shareholder has a minority stake and without…

Anna Tzanaki ‘Varieties and Mechanisms of Common Ownership: A Calibration Exercise for Competition Policy’ (forthcoming)

Minority shareholdings have been on the regulatory agenda of competition authorities for some time. Recent empirical studies, however, draw attention to a new, thought provoking theory of harm: common ownership by institutional investors holding small, parallel equity positions in several competing firms within concentrated industries. The European Commission has already made use of the common ownership theory in its merger enforcement practice, while the US antitrust agencies have proposed amending their merger control reporting thresholds to account for aggregate institutional holdings. This paper, available here, reviews common ownership from the perspective of merger control. It starts with a novel distinction between two types of common ownership – ‘concentrated’, which broadly fits within existing concepts in merger control; and ‘diffuse’, which broadly encompasses the instances of common ownership that avoid merger scrutiny in jurisdictions that rely on control-based thresholds. It is this latter form of common ownership that preoccupies the contemporary debate, and falls through the gaps of competition law. The…

Bill Kovacic ‘Competition Policy Retrospective: The Formation of the United Launch Alliance and the Ascent of SpaceX’ (2020) George Mason Law Review

In May 2005, Boeing and Lockheed Martin announced plans to form the United Launch Alliance (ULA), a joint venture which combined the only two suppliers of medium-to-heavy national security related launch services to the U.S. government. With input from the US Department of Defence (DOD), the FTC cleared the transaction. The FTC’s approval rested on two assumptions: that the efficiencies claimed by the merging parties were significant, and that the DOD and the NASA would use best efforts to facilitate entry into the launch services sector. This article, available here, examines the merger clearance decision and assesses the assumptions supporting this 2006 decision in light of subsequent experience. In short, those assumptions proved justified. ULA thus far has met the reliability expectations that guided the analysis of the DOD and the FTC. From its first days of operation through July 30 2020, ULA has made 140 launches without a failure. The venture has achieved and surpassed the reliability goals that…

Mark Glick, Catherine Ruetschlin and Darren Bush ‘Big Tech’s Buying Spree and The Failed Ideology Of Competition Law’ (forthcoming, Hastings Law Journal)

Big Tech is on a buying spree. Companies like Apple, Google, Facebook, and Amazon are gobbling up smaller companies at an unprecedented pace. Google has acquired 270 companies since 2001, including Android, YouTube, and Waze. Microsoft has made over 100 acquisitions in the last ten years, including acquisitions of Skype, Nokia Devices, LinkedIn and GitHub. Amazon has made a similar number of acquisitions. Facebook has acquired ninety companies. The law of competition is not ready for Big Tech’s endless appetite. This article, available here, shows how the extraordinary burden of proof required to prohibit a merger under the potential competition doctrine hobbles antitrust law and policy. It illustrates this problem with a close study of Facebook. The article assembles a database of Facebook’s completed acquisitions—ninety in all—and shows how the “potential competition” doctrine renders competition law entirely impotent to protect the consumer interest in this space. It further argues that, with à simple structural presumption, the Federal Trade Commission (FTC)…