Monday, December 9, 2019

Antitrust Analysis of Platform Markets: Why the Supreme Court Got It Right in American Express



See our latest release

AmEX book

Antitrust Analysis of Platform Markets:
Why the Supreme Court Got It Right in American Express



Platform businesses that facilitate connections between different stakeholders play an increasingly prominent role in the economy. Several of the largest firms in the world operate platforms. In 2018, the U.S. Supreme Court issued a seminal decision, Ohio et. al. v. American Express, on the analysis of antitrust issues involving these sorts of businesses. In Antitrust Analysis of Platform Markets: Why the Supreme Court Got It Right in American Express, David S. Evans and Richard Schmalensee explain the economic basis for the Court’s analysis. The Court found that antitrust analysis of two-sided platforms that enable transactions between distinct groups, such as cardholders and merchants, must account for both groups in market definition and the analysis of anticompetitive effects The authors describe the problems with alternative approaches that were presented to the Court and consider the key criticisms levied against the Court’s analysis. The book is based on a series of articles the authors wrote leading up to and following the decision including the amicus brief they submitted to the Court. Given the growing importance platforms in the economy, antitrust will deal with more cases governed by the American Express decision in the U.S., as well as judgments of other courts on similar issues around the world. Many questions about the sound antitrust analysis of platform businesses remain unanswered. This book makes a timely contribution to the ongoing debate about how to apply antitrust to platforms and the digital economy in which they play a significant role.

The book constitutes a useful tool to not only interpret, but to potentially predict, the current and forthcoming application and direction of competition law in media markets in the United States, the European Union, and other jurisdictions worldwide.


Table of Contents


Authors’ Note


Where's The Harm?   

The Rule of Reason    

Under and Over Enforcement  

Two-Sided Red Herrings   

All That Jazz  

Supreme Court Decision   

Brief for the United States as Respondent Supporting Petitioners  

Brief of 28 Professors of Antitrust Law as Amici Curiae Supporting Petitioners  

Brief for Amici Curiae John M. Connor, Martin Gaynor, Daniel McFadden, Roger Noll, Jefferey M. Perloff, Joseph A. Stiglitz, Lawrence J. White, and Ralph A. Winter in Support of Petitioners

December 9, 2019 | Permalink | Comments (0)

The Impact of the International Competition Network on Competition Advocacy and Global Competition Collaboration

Hetham Abu Karky, Western Law describes The Impact of the International Competition Network on Competition Advocacy and Global Competition Collaboration.


The International Competition Network (ICN) is an informal, virtual network that seeks to facilitate cooperation between competition law authorities globally. This study attempts to determine the impact of the ICN on competition advocacy and global competition collaboration. It does so by examining the impact of the ICN’s Advocacy Working Group’s activities on ICN members’ domestic legislation and analyzing whether the ICN can help domestic competition authorities cooperate in international matters in two principal ways. First, the article assesses the impact of ICN efforts on legislation and international collaboration with respect to competition policy as well as working methods to deal with multinational cases. Second, the article identifies the strengths and weaknesses of ICN strategies and provides recommendations on how to enhance ICN’s operations. These two methods of analysis help to determine if the ICN could serve as the basis for a new approach to address competition issues globally.

December 9, 2019 | Permalink | Comments (0)


Herbert Hovenkamp University of Pennsylvania Law School; University of Pennsylvania - The Wharton School; University College London and Fiona M. Scott Morton Yale School of Management; National Bureau of Economic Research (NBER) are FRAMING THE CHICAGO SCHOOL OF ANTITRUST ANALYSIS.

ABSTRACT: The Chicago School of antitrust has benefitted from a great deal of law office history, written by admiring advocates rather than more dispassionate observers. This essay attempts a more neutral stance, looking at the ideology, political impulses, and economics that produced the Chicago School of antitrust policy and that account for its durability.
The origins of the Chicago School lie in a strong commitment to libertarianism and nonintervention. Economic models of perfect competition best suited these goals. The early strength of the Chicago School of antitrust was that it provided simple, convincing answers to everything that was wrong with antitrust policy in the 1960s, when antitrust was characterized by over-enforcement, poor quality economics or none at all, and many internal contradictions.
The Chicago School’s greatest weakness is that it did not keep up. Its leading advocates either spurned or ignored important developments in economics that gave a better accounting of an economy that was increasingly characterized by significant product differentiation, rapid innovation, networking, and strategic behavior. The Chicago School’s initial claim was that newer models of the economy lacked testability. That argument lost its credibility, however, as industrial economics experienced an empirical renaissance, nearly all of it based on various models of imperfect competition. Students getting PhDs in economics increasingly abandoned perfect competition as a useful starting point.
What kept Chicago alive was the financial support of firms and others who stood to profit from less intervention. Properly designed antitrust enforcement is a public good. Its beneficiaries – consumers -- are individually small, numerous, scattered, and diverse. Those who stand to profit from nonintervention were fewer in number, individually much more powerful, and much more united in their message. As a result, the Chicago School went from being a model of enlightened economic policy to a powerful tool of regulatory capture.

December 9, 2019 | Permalink | Comments (1)

Friday, December 6, 2019

The Compulsory Notification Mechanism under Merger Control in China: Evaluation and Reform

Jian Li Shanghai Jiao Tong University (SJTU) - KoGuan Law School and Liyang Hou Shanghai Jiao Tong University (SJTU) - KoGuan Law School discuss The Compulsory Notification Mechanism under Merger Control in China: Evaluation and Reform.


The compulsory notifications for mergers transactions under the framework of antitrust law aims to remedy anti-competitive harm by blocking or conditionally approving mergers ex ante in conjunction with the deterrence effects. However, such a mechanism brings prominent costs in addition to the benefits. It is thus necessary to evaluate both the costs and benefits to implement such a mechanism to see if there is an efficient alternative. The first decade of the enforcement of China’ merger control demonstrated insufficient benefits due to the low proportion of blocked and conditional approved cases and unsatisfactory deterrence effects. In the meanwhile, the costs to implement the compulsory mechanism in China is substantially larger, including high investigation costs, high opportunity costs associated with suspended merger transactions, and high notification costs. In comparison, the voluntary notification mechanism, though superficially producing less benefits in preventing anti-competitive mergers, can significantly save implementation costs. Given the limited administrative budget and the active ex post antitrust enforcement currently ongoing in China, the voluntary mechanism is advisable to be the most feasible option for the future reform.

December 6, 2019 | Permalink | Comments (0)

Promises and Limits of Behavioral Antitrust From a Deterrence Perspective

Godefroy de Moncuit University of Paris saclay; The Business Law and New Technologies Center (DANTE Lab Paris Versailles) offers Promises and Limits of Behavioral Antitrust From a Deterrence Perspective.


The new paradigm introduced by behavioral studies changes the traditional approach on the incitement to break the law. This paper aims to examine the relevance of a deterrent system based not on the rational choice theory, but on behavioural theory.

December 6, 2019 | Permalink | Comments (0)

Thursday, December 5, 2019

Anti-Hipster Antitrust

John Newman, Miami advocates Anti-Hipster Antitrust.

ABSTRACT: Antitrust is undergoing a renaissance. New voices have emerged. Issues long considered settled have been opened for re-examination. Lively debate has prompted antitrust stakeholders to re-evaluate familiar concepts like “consumer welfare.” Some have welcomed this opportunity for self-reflection. But it has also been greeted with a different set of responses that seem more likely to stifle debate than to encourage it. These include charges of “populism,” fallacious criticisms, and a refusal to engage with the core arguments of the new progressives, who are labeled as “Hipster Antitrust.”

December 5, 2019 | Permalink | Comments (0)

Private Antitrust Enforcement in the US and the EU - A Comparison of Key Issues

Thomas Obersteiner, Willkie Farr & Gallagher LLP offers Private Antitrust Enforcement in the US and the EU - A Comparison of Key Issues.

ABSTRACT: This paper explains how the EU has adopted some elements from the US system of private enforcement but has made very different policy choices with respect to other elements. The paper begins with a glimpse at the origins of private enforcement and a consideration of two of the biggest challenges to a comparison, namely the federal legal structures in the US and the EU and the different purposes of private enforcement (compensation v. deterrence). The core of this paper is a comparison of nine key issues of private antitrust litigation, including, among others: standing, passing-on, collective actions and discovery.

December 5, 2019 | Permalink | Comments (0)

How Concerned Should We Be About Algorithmic Tacit Collusion? Comments on Calvano et al.

Ai Deng, NERA asks How Concerned Should We Be About Algorithmic Tacit Collusion? Comments on Calvano et al.

ABSTRACT: A recent study by four economists (Calvano et al, 2019) has undoubtedly refueled the public and academic interest in algorithmic tacit collusion. In this study, the researchers find that their “algorithms consistently learn to charge supra-competitive prices, without communicating with one another… this finding is robust to asymmetries in cost or demand, changes in the number of players, and various forms of uncertainty.” Not surprisingly, this research has since been reported in a number of outlets including the Wall Street Journal, Financial Times, MIT Tech Review, among others. What does the study say about the likelihood of algorithmic collusion in the real world? Does it fundamentally change how we should think about tacit collusion in general? These are the questions I address in this note.

December 5, 2019 | Permalink | Comments (0)

Why Does Price Fixing Persist? The Role of Fairness

Carlos Delvasto, Pontificia Universidad Javeriana asks Why Does Price Fixing Persist? The Role of Fairness.

ABSTRACT: The assumption that consumer welfare and efficiency is the sole concern of antitrust law conflicts with what people view as unfair about antitrust law. The present article advances the understanding of antitrust law by providing some theoretical considerations and empirical results of people's tendency to judge price-fixing as unfair when they feel that firms obtain a benefit at the expense of consumers. This is due to the fact that buyers perceive transaction terms as rights; and, sellers have a right to profit according to the reference frame of the initial transaction. People's attitudes towards price-fixing were obtained through experimental surveys on Amazon Mechanical Turk in the United States. The empirical results suggest that the dual entitlement theory captures a tendency of people to judge price fixing based on the rule of fairness. The main implication is that antitrust authorities should not take for granted that people view price-fixing as something harmful and should emphasize people's moral intuitions of price-fixing as a limitation for actual compliance antitrust programs. The suggestion is for antitrust authorities to focus corporate compliance programs on people's intuitions of price-fixing as a way to improve compliance in the prevention of cartel agreements.

December 5, 2019 | Permalink | Comments (0)

Wednesday, December 4, 2019

latest Competition Lore episode

Merger Breakups

Menesh Patel, UC Davis has a paper on Merger Breakups.

ABSTRACT: One of today’s most pressing antitrust questions is how antitrust should address the conduct of dominant technology companies such as Amazon, Facebook, and Google. These companies, once considered untouchable by antitrust law, are now the subject of growing calls for their antitrust breakup, including through actions by the federal antitrust agencies to challenge and unwind key mergers in the technology space, such as Facebook-Instagram, Amazon-Whole Foods, and Google-DoubleClick, among others. But nearly every one of the technology mergers identified for ex-post challenge and breakup was previously reviewed and cleared by the antitrust agencies pursuant to the existing federal merger review scheme, including in some instances after a lengthy investigation. The calls for the antitrust breakup of the identified technology mergers therefore implicate a much more fundamental antitrust question: should the antitrust agencies more readily challenge mergers that they themselves previously reviewed and cleared pursuant to the existing federal merger review scheme? This article offers a qualified affirmative response to that question. The antitrust agencies should increase the extent of their challenges to previously reviewed and cleared mergers, but should do so in a principled way that respects the significant mitigating factors associated with an expansion in such ex-post merger challenges. By conducting that principled analysis, this article identifies important limiting conditions on the expansion of agency challenges to previously reviewed and cleared mergers, both generally and with respect to the targeted technology mergers in particular.

December 4, 2019 | Permalink | Comments (0)

Video Killed the Radio Star? Online Music Videos and Recorded Music Sales

Tobias Kretschmer, Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR) and Christian Peukert, Universidade Catolica Portuguesa; ETH Zurich - Center for Law and Economics ask Video Killed the Radio Star? Online Music Videos and Recorded Music Sales.

ABSTRACT: We study the heterogeneous effects of online video platforms on the sales volume and sales distribution of recorded music. Identification comes from two natural experiments in Germany. In 2009, virtually all music videos were blocked from YouTube due to a legal dispute. In 2013, the dedicated platform VEVO entered the market, making videos of a large number of artists available overnight. Our estimates suggest that restricting (enabling) access to online videos decreases (increases) recorded music sales on average by about 5-10%. We show that the effect operates independently of the nature of video content, suggesting that user-generated content is as effective as official content. Moreover, we highlight heterogeneity in this effect: Online music video disproportionally benefits sales of new artists and sales of mainstream music.

December 4, 2019 | Permalink | Comments (0)

An Empirical Analysis of Minimum Advertised Price Restrictions

Danial Asmat, U.S. Department of Justice, Antitrust Division and Chenyu Yang, University of Maryland - Department of Economics offer An Empirical Analysis of Minimum Advertised Price Restrictions.

ABSTRACT: Recent theory has examined the competitive effects of minimum advertised price (MAP) restrictions: manufacturer policies that can limit the ability of consumers to search for product prices. In this paper, we empirically study the effect of a major electronics manufacturer’s MAP policy on the e-retail prices for its hardware products. Our approach leverages three types of data: contractual MAP values by product from 2011-2013; daily prices across its largest e-retailers; and the frequency of visits to each e-retailer from a representative household panel. We use a model of search with advertised prices to guide two types of findings. First, descriptive patterns of retailer prices are consistent with the market exhibiting consumer search costs, whereby it is costlier to search when price is below MAP than above MAP. Second, reduced form models imply that MAP diminishes the effect of increased retailer competition on decreased price dispersion, whereby prices are up to 6% more dispersed with MAP than without MAP. This is consistent with a model of inter-retailer price discrimination.

December 4, 2019 | Permalink | Comments (0)

Tuesday, December 3, 2019

Why Does the Consumer Welfare Standard Work? Matching Methods to Markets

James Bernard, Analysis Group, Inc., Rebecca Kirk Fair, Analysis Group, D. Daniel Sokol, University of Florida Levin College of Law ask Why Does the Consumer Welfare Standard Work? Matching Methods to Markets.

ABSTRACT: We suggest that consumer welfare is the appropriate standard for antitrust  analysis  across an array of industries. Unlike critiques that treat consumer welfare as a caricature within a simplistic early-1970s framework of “Chicago School” economics, we suggest that consumer welfare, as understood today, adapts to changes in economic thinking and industry dynamics.  Changes in economics lead to different legal presumptions.  When shifts occur in economic understanding, this may lead to a reevaluation of the legal presumption underlying the behavior in question and the potential need for a more nuanced treatment of certain conduct under the rule of reason. Because economic analysis allows for more precision and objectivity than "fairness," we believe that it is important to highlight case examples that show how economic analysis has shifted over time in ways that both promote enforcement and limit enforcement. All too often, the populist narratives of antitrust overlook such flexibility and the evolution in economic thinking, where practitioners have applied new theories and approaches to new settings.


December 3, 2019 | Permalink | Comments (0)

Balancing the Conspiracy’s Books: Inter-Competitor Sales and Price-Fixing Cartels

Christopher Leslie, UC Irvine is Balancing the Conspiracy’s Books: Inter-Competitor Sales and Price-Fixing Cartels.

ABSTRACT: Antitrust law is designed to deter and dismantle price-fixing cartels. The success of the antitrust regime depends on courts being able to recognize price fixing and to hold price fixers accountable. Unfortunately, federal courts often do not appreciate the mechanics of cartelization, which leads judges to absolve price fixers of liability. This Article seeks to reduce the likelihood of that outcome by explaining how cartels use inter-competitor sales – sometimes called buybacks – as a mechanism to balance the cartel’s books. Until recently, all federal courts to consider the issue have held inter-competitor sales to be evidence of price fixing. Recently, however, the Third Circuit created a circuit split. With this circuit split as its frame, the Article explains why inter-competitor sales are inherently probative of collusion. Using a combination of economic analysis and empirical case studies, this Article examines the critical role that buybacks can play – and have played – in price-fixing conspiracies. This is the first law review article to focus on the relationship between inter-competitor sales and price-fixing conspiracies.

December 3, 2019 | Permalink | Comments (0)

2020 Antitrust Writing Awards: NOMINATIONS OPEN NOW: Deadline for submissions is Sunday, December 22, 2019

2020 Antitrust Writing Awards are now open. For the 9th consecutive year, Concurrences has brought together an impressive Jury consisting of antitrust enforcers, professors, and in-house counsel to select the Best Articles, Best Soft Laws, and Best Student Paper from 2019.

The aim of the Antitrust Writing Awards is to promote competition scholarship and to contribute to competition advocacy.

The 2020 Antitrust Writing Awards contribute to this achievement by selecting the best antitrust writings published in 2019. The Awards consist of:
- “Best Articles”: best academic, business, and student articles written by one or few individual authors.
- “Best Soft Law”: best non-enforcement tools written by competition agencies.
- “Best Newsletters”: ranking of best law firm antitrust newsletters.

The Jury is composed of leading antitrust enforcers, academics and counsel.

Nominations for 2020 Antitrust Writing Award will be open from Monday, December 2, 2019 until Sunday, December 22, 2019. You can submit your nominations below:

December 3, 2019 | Permalink | Comments (0)

Strict competition enforcement and welfare: A constitutional perspective based on Article 101 TFEU and sustainability

ABSTRACT: This article investigates the purpose and workings of EU competition law and policy: how does the protection of competition promote welfare? It scrutinizes the claim that sustainable consumption and production (SCP) requires flexible rather than strict enforcement of Article 101 TFEU. Flexible antitrust proponents argue that SCP requires sector-wide private coordination, as manufacturers suffer from first mover disadvantage if consumers can opt for cheaper, less sustainable products. Four main arguments build on compliance with, respectively, the constitutional context of EU competition law, the more economic approach, the legitimate objective doctrine, and the useful effect doctrine. This article questions all four arguments. Integrating principle and practice, the article shows that strict competition enforcement is the way forward to promote welfare, in this case SCP. Problems of under-regulation should be addressed by the regulatory State.

December 3, 2019 | Permalink | Comments (0)

Transaction Costs and Competition Policy

Dennis Carlton, Chicago addresses Transaction Costs and Competition Policy. Worth reading!

ABSTRACT: This paper evaluates current antitrust policy in light of our current understanding of how transaction costs influence the ability of firms and consumers to deal with market power. The paper shows how the failure to consider transaction costs can lead to erroneous policy decisions. Many models employed today make simplifying assumptions about transaction costs that can lead to biased results in analyzing vertical and horizontal issues. The increased ability to monitor the effect of promotional behavior should cause us to reexamine whether free riding justifications, previously accepted as justifications for various vertical restrictions, still hold. Nash bargaining and Nash-in-Nash models raise concerns about the simplified assumptions assumed in which supposedly high transaction costs restrict the choice and form of the assumed competitive alternatives. The increasing importance of two-sided markets together with an understanding of transaction costs is needed to understand antitrust conduct in those markets. The recent Amex case is likely to lead to lots of litigation in these types of markets. Finally, the establishment of property rights for a consumer to his or her data could fail to remedy antitrust concerns that certain dominant firms are immune to competition because consumers do not own their data unless that property right is limited so that consumers cannot exclusively sell their data to one firm.

December 3, 2019 | Permalink | Comments (0)

Prisms of Distance and Power: Viewing the U.S. Regulatory Tradition

David Gerber, Chicago Kent explores Prisms of Distance and Power: Viewing the U.S. Regulatory Tradition.

ABSTRACT: Distorted images of American regulatory ideas and practices frame foreign responses to these practices as well as foreign views of the economic policies of the United States. US power both embeds and contributes to these distorted images. This article highlights the evolution of these distortions and the ways in which business history has intertwined with legal and political history throughout the evolution, It focuses on a specific area of regulation – antitrust or competition law – in order to ground the more general discussion. The article provides insights into the relationship between cognitive distance and power and into its pernicious effects on transnational discussions and decisions involving competition law.

December 3, 2019 | Permalink | Comments (0)

Monday, December 2, 2019

Assistant Attorney General Makan Delrahim Delivers Remarks at the Federalist Society National Lawyers Convention

See here.

December 2, 2019 | Permalink | Comments (0)