Friday, December 31, 2021
Retail Markups and Discount-Store Entry
Retail Markups and Discount-Store Entry
Abstract
"Hard discounters" are retail formats that set retail food prices even lower than existing discount formats, such as Walmart and Target. Offering limited assortments and focusing on store-brands, these formats promise to change the competitive landscape of food retailing. In this paper, we study the effect of entry of one hard-discount format on markups earned by existing retail stores, focusing on several important grocery markets across the Eastern U.S. Focusing on establishment-level profitability, we estimate store-level markups using the production-side approach of De Loecker and Warzynski (2012). We find that hard-discounter entry had the expected effect of reducing margins from similar stores, but did not affect markups earned by stores in the same market that are likely to appeal to a different market segment. In general, hard-discounter entry reduced markups for incumbent retailers by 7:3% relative to markups in non-entry markets. These results indicate that the net effect of hard-discounter entry reduces the overall level of store profitability, regardless of higher sales realized by incumbent retailers.
December 31, 2021 | Permalink | Comments (0)
Thursday, December 30, 2021
Market Entry, Fighting Brands, and Tacit Collusion: Evidence from the French Mobile Telecommunications Market
Abstract
We study a major new entry in the French mobile telecommunications market, followed by the introduction of fighting brands by the three incumbents. Using an empirical oligopoly model, we find that the incumbents’ fighting brand strategies are difficult to rationalize as unilateral best responses. Instead, their strategies are consistent with a breakdown of tacit semi-collusion: before entry, the incumbents could successfully coordinate on restricting product variety to avoid cannibalization; after entry, this outcome became harder to sustain because of increased business stealing incentives. Consumers gained considerably from the added variety and, to a lesser extent, from the incumbents’ price responses
December 30, 2021 | Permalink | Comments (0)
Wednesday, December 29, 2021
Consolidation on Aisle Five: Effects of Mergers in Consumer Packaged Goods
Consolidation on Aisle Five: Effects of Mergers in Consumer Packaged Goods
Abstract
We study the effects of mergers in the consumer packaged goods industry, a sector that comprises approximately one-tenth of GDP in the United States. We match data on all recorded mergers between 2006 and 2017 with retail scanner data. In comparison to prior work, which focuses on case studies of large mergers, our approach allows us to estimate the effect of a typical merger. Most mergers we study are highly asymmetric (a large firm acquires a much smaller firm) and rarely challenged. By studying these mergers, we provide new evidence on the effects of mergers on prices, quantities, product availability, and exit. On average, mergers lead to a short-run price effect at the target of 1% and declines in total revenue of 7%. These average effects hide substantial heterogeneity across different groups of mergers. Our results highlight the importance of effects not captured in the canonical model, such as effects on consumer surplus through changes in product availability, and through inefficient firms' capital being repurposed by more productive acquirors.
December 29, 2021 | Permalink | Comments (0)
Tuesday, December 28, 2021
App Stores, Aftermarkets & Antitrust
App Stores, Aftermarkets & Antitrust
Abstract
App stores have become the subject of controversy and criticism within antitrust. For instance, app developers such as Spotify and Epic Games (creator of Fortnite) allege that Apple’s 30 percent cut of all sales in the App Store violates the antitrust laws and is indicative of monopoly power. The idea is that iPhone users are locked into Apple’s walled garden iOS platform, which frees Apple to engage in misconduct in the App Store “aftermarket” to the detriment of users and app developers.
This Article challenges the recent economic and legal characterizations of app stores and the nature of the alleged harm. First, this Article builds an accessible, economic framework to illustrate how app stores do not represent the same type of aftermarkets that were condemned in the Supreme Court’s landmark Kodak case. Importantly, the differences between Kodak-like aftermarkets and app store aftermarkets raise serious questions whether the digital revival of the aftermarket doctrine conforms with the economic realities of these markets.
Second, the complexity of the commercial relationships found in app stores has raised questions regarding who has standing to seek antitrust damages in this type of market setting. This Article provides an overview of the development of the current doctrine of antitrust standing—focusing on Illinois Brick and Apple v. Pepper. Further, this Article contends that Justice Kavanaugh’s opinion in Pepper, which gave iPhone users the right to sue Apple over the 30 percent commission, was right for the wrong reason. Instead, Justice Gorsuch’s dissent offers a much more economically sound approach to antitrust standing—as his “proximate cause” standard does not artificially focus on identifying the “direct purchaser,” which is unnecessarily limiting for more complex commercial relationships. As the number of antitrust claims against various app stores proliferate, the consequences of faulty characterizations of app stores will only grow.
December 28, 2021 | Permalink | Comments (0)
Monday, December 27, 2021
A Web of Paradoxes: Empirical Evidence on Online Platform Users and Implications for Competition and Regulation in Digital Markets
A Web of Paradoxes: Empirical Evidence on Online Platform Users and Implications for Competition and Regulation in Digital Markets
Abstract
This article presents and analyses the results of a large-scale empirical study in which over 11,000 consumers from ten countries in five continents were surveyed about their use, perceptions and understanding of online platform services. To the author’s knowledge, this is the first cross-continental, multi-platform empirical study of users of online platform services of its kind. Amongst others, the study probed platform users about their multi-homing and switching behaviour; engagement with defaults; perceptions of quality, choice, and well-being; attitudes towards targeted advertising; understanding of basic platform operations and business models; and, valuations of “free” platform services. The empirical evidence from the consumer demand side of some of the most popular multi-sided platforms reveals a web of paradoxes that needs to be navigated by policymakers and legislatures to reach evidence-led solutions for better-functioning and more competitive digital markets. This article contributes to literature and policy by, first, providing a multitude of novel empirical findings and, second, analysing those findings and their policy implications, particularly regarding competition and regulation in digital markets. These contributions can inform policies, regulation, and enforcement choices in digital markets that involve services used daily by billions of consumers and are subjected to intense scrutiny, globally.
December 27, 2021 | Permalink | Comments (0)
Friday, December 24, 2021
Anticompetitive Merger Review
Anticompetitive Merger Review
Abstract
U.S. antitrust law empowers enforcers to review pending mergers that might undermine competition. But there is growing evidence that the merger-review regime is failing to perform its core procompetitive function. Industry concentration and the power of dominant firms are increasing across key sectors of the economy. In response, progressive advocates of more aggressive antitrust interventions have critiqued the substantive merger-review standard, arguing that it is too friendly to merging firms. This Article traces the problem to a different source: the merger-review process itself. The growing length of reviews, the competitive restrictions merger agreements place on acquisition targets during review, and the targets’ resulting loss of strength harm competition and consumers. As a result, an enforcement regime designed to protect competition is damaging it instead. The rise of antitrust reverse termination fees (“ARTFs”)—payments from the acquirer to the target if the merger fails antitrust review—demonstrates the anticompetitive effect of the review process. This Article argues that these fees represent the parties’ negotiated prediction of the competitive costs to the target of entering the merger agreement (and therefore the competitive gains to the acquirer and other rivals in the relevant market). ARTFs also indicate the possibility of anticompetitive manipulation of the merger-review process. Knowing that reviews sometimes take over a year to resolve, acquirers can enter a merger agreement and use an ARTF to buy competitive peace—even when they expect the merger will be rejected—all the while harming consumers. Reform proponents have suggested several ways potentially to shorten merger investigations, such as limiting enforcement agencies’ discovery demands, but these modifications only reduce the problem at the margins. This Article proposes a more effective reform: a requirement that the antitrust enforcement agencies announce a group of highly concentrated markets in which they will challenge any proposed merger, unless one of the firms is failing. This strategy, which the antitrust agencies have employed in an ad hoc fashion in the past, will discourage anticompetitive mergers and eliminate lengthy reviews that harm consumers.
December 24, 2021 | Permalink | Comments (0)
Thursday, December 23, 2021
Flagship Entry in Online Marketplaces
Flagship Entry in Online Marketplaces
Abstract
In the world of omnichannel retail, some brands open a flagship store at online marketplaces, while others avert it. Focusing on a large e-commerce platform, we empirically study how flagship entry affects consumers, the platform, and various sellers on the platform.
We find flagship entry may benefit consumers by expanding the choice set, by intensifying price competition within the entry brand, and by improving consumer perception for parts of the platform. In the meantime, flagship entry cannibalizes the sales of same-brand sellers, while other brands may gain as the buyer base expands on the platform.
Counterfactual simulation suggests that flagship entry improves the gross merchandise value (GMV) of the platform but hurts existing sellers of the entry brand. On average, the effect on consumer welfare is more positive if the flagship entry is from a non-prominent brand than from a prominent brand, because consumers tend to lower their willingness to pay for individual sellers upon a prominent flagship entry. In hypothetical scenarios where flagship entry were accompanied by constraints on other same-brand sellers, the reduced competition would benefit the flagship store but hurt consumers.
December 23, 2021 | Permalink | Comments (0)
Wednesday, December 22, 2021
Common Ownership, Executive Compensation, and Product Market Competition
Common Ownership, Executive Compensation, and Product Market Competition
Date Written: October 5, 2021
Abstract
The negative effects of common ownership on competition have received significant attention, but many proposed mechanisms for institutional investor influence seem implausible. We develop and test an analytical model of optimal compensation in an oligopoly with common ownership, focusing on revenue-based pay as a plausible channel through which institutional investors might influence competition. Our model implies a negative effect of common ownership on firms' use of revenue-based pay. Using both associative analyses and an event study difference-in-differences design based on plausibly exogenous institutional mergers, we find that common ownership has zero (or a marginally positive) effect on the use of revenue-based pay. Results involving relative performance incentives are similar. Collectively, our results provide no support for the notion that cross-owning block-holders influence compensation contracts in order to soften executives' incentives to compete aggressively.
December 22, 2021 | Permalink | Comments (0)
Tuesday, December 21, 2021
India's Cartel Penalty Practices, Optimal Restitution and Deterrence
India's Cartel Penalty Practices, Optimal Restitution and Deterrence
Abstract
We review the cartel penalty and leniency practices of the Competition Commission of India (CCI), in light of the law and economics literature on optimal penalties, as well as current practices in different jurisdictions. Our analysis reveals that although India’s Competition Act allows for a much harsher penalty than other jurisdictions in cartel cases, the actual practices followed by the CCI are often inconsistent and non-transparent, resulting in a large number of court cases and very low penalty recovery. This inconsistency also weakens the leniency programme adopted by the CCI in order to induce cartelists to come forward with evidence. In the majority of cases, penalties fall short of restitution and deterrence benchmarks suggested by some earlier literature. We conclude with some suggestions to improve India's penalty and leniency regime.
December 21, 2021 | Permalink | Comments (0)
Monday, December 20, 2021
Will the Supreme Court Recover Its Own Fumble? How Alston Can Repair the Damage Resulting From NCAA's Sports League Exemption
Will the Supreme Court Recover Its Own Fumble? How Alston Can Repair the Damage Resulting From NCAA's Sports League Exemption
Abstract
Horizontal restraints are unlawful per se unless a court can identify some redeeming virtue that such restraints may create. In National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma, the Supreme Court rejected this standard, refusing to condemn horizontal restraints on price and output imposed by the NCAA without specifying any possible redeeming virtues. The Court emphasized that other restraints not before the Court were necessary to create and maintain athletic competition like that supervised by the NCAA. This exemption for sports leagues ensures that all restraints imposed by such entities merit Rule of Reason scrutiny, regardless of how harmful they appear.
Building on a forthcoming article, this Essay contends that NCAA’s sports league exemption contravenes traditional antitrust principles, including the ancillary restraints doctrine (which NCAA ignored). This Essay also argues that the exemption increases the number of false negatives and potentially impedes the conduct of Rule of Reason analysis. Finally, this Essay explains how the exemption inspired and informed an ill-advised doctrinal innovation, the so-called “Quick Look” methodology of Rule of Reason analysis, whereby courts condemn certain restraints “in the twinkling of an eye.” Some lower courts have recently extrapolated from this approach and exempted restraints limiting rivalry for the services of student athletes from Rule of Reason scrutiny, rendering such restraints lawful per se.
The Supreme Court is currently reviewing the Ninth Circuit’s holding in National Collegiate Athletic Association v. Alston, which condemned NCAA regulations limiting the size of athletic scholarships. This Essay provides the Alston Court with a roadmap for eliminating the sports league exemption, thereby placing such restraints on equal footing with restraints imposed by other entities. The Essay also advises the Court to reject lower court decisions that built upon the Quick Look doctrine and have treated restraints governing student athlete eligibility as lawful per se, thus exempting them from Rule of Reason scrutiny. Finally, the Essay concludes that the restraints before the Court in Alston may well produce cognizable antitrust benefits by overcoming the market failure that would result from unbridled rivalry for the services of student athletes. The Essay submits that the Court should articulate a Rule of Reason methodology in Alston that reflects the non-technological nature of such efficiencies.
December 20, 2021 | Permalink | Comments (0)
Friday, December 17, 2021
Private Enforcement and Platform Regulation: Two GAFA-cases – and What They Tell Us About the Digital Markets Act
Private Enforcement and Platform Regulation: Two GAFA-cases – and What They Tell Us About the Digital Markets Act
Abstract
Private enforcement has been underrated as an enforcement pillar in achieving the aims of competition law. While the focus has been on damages cases in the past years, private enforcement also has a role to play for stopping infringements, particularly with injunctions.
In this contribution, I report two fascinating cases from Germany. Both cases involve digital gatekeepers and both were solved by a first instance court. One case concerns a cooperation agreement of Google with the German government. The other case deals with the deactivation of the Amazon account of a business user. Both cases were dealt with very quickly by the Munich I District Court (Landgericht München I).
The analysis of the cases sheds some light on the potential of private enforcement for “taming Big Tech”. It also holds a lesson for the drafting of the Digital Markets Act: Enforcement should not rest with the European Commission alone. Instead, it should be set out clearly how private users can monitor and remedy infringements of obligations from the Digital Markets Act.
December 17, 2021 | Permalink | Comments (0)
Uncommon Implications of the Common Ownership Hypothesis
Uncommon Implications of the Common Ownership Hypothesis
Abstract
One of the most pressing dilemmas facing consumer protection policy and corporate law is the common ownership problem – the idea that diversified investment products that help millions of consumers are indirectly making them worse off. The hypothesis states that when the same investment funds own sizable stakes in rival firms, those firms will have less incentive to compete with one another, leading to higher prices, lower wages and greater income inequality. We argue that current attempts to resolve the common ownership question are destined for stalemate because they are premised on a misunderstanding of the empirical evidence that frames the issue. The problem stems from a flawed measure of common ownership that drives the results of the empirical research on common ownership mechanically, rather than revealing anything about the underlying reality of the issue. We demonstrate this flaw by replicating the foundational “airline paper,” showing that a relationship between ownership and anticompetitive price increases can be obtained using completely random common ownership or low, presumably harmless levels of common ownership, in line with what some have proposed as a legal limit.
We propose an alternative empirical and legal approach to the common ownership problem that empirically tests a set of logical implications of common ownership theory that have thus far been missing from the conversation. These implications entail empirical observations that should be surprising and uncommon absent the effects of common ownership. Specifically, if the economic theory that underpins the hypothesis is true, certain transactional forms in the life of a firm that are assumed irrelevant for consumers should have dramatic effects on consumer prices. For example, Mondelez’s decision to change a subsidiary’s on-paper nationality through a tax inversion would be expected to lower other companies’ coffee prices. And Proctor & Gamble’s decision to pay in stock instead of cash to acquire Gillette should cause unrelated third-party companies to sell cheaper batteries. We explain how predictions like these can guide legal research and empirical inquiry into common ownership’s effects, mechanisms and solutions.
December 17, 2021 | Permalink | Comments (0)
Thursday, December 16, 2021
Allan Fels on Australian competition policy
Allan Fels has had a massive global presence since his time leading at ACCC. He has a new discussion worth reading in a publication called The Conversation.
December 16, 2021 | Permalink | Comments (0)
Call for Abstracts: Competition & IP in the Digital Markets
Call for Abstracts: Competition & IP in the Digital Markets
Following digitalization of even the most traditional brick and mortar sectors of the economy - such as books, retail and even education - a well-functioning internal market can only be guaranteed by ensuring competitiveness of the digital markets. The benefits of a digital single market cannot be under-estimated. Relentless innovation has facilitated this trend of digitalization and digitization. What role do intellectual property law and competition law play in this digital world? How can a more economic analysis strengthen our innovation policies to achieve a truly competitive digital single market?
In this conference, we explore this digital dynamic of competition and intellectual property law from an inter-disciplinary perspective. A well-balanced debate and meaningful discussion on innovation in the digital economy, calls for a discussion on the legal and economic perspective on digital markets, such as by an examination of the potential effects of (allegedly) exclusionary and exploitative conduct carried out by the multi-sided platforms.
Conference venue:
Maastricht University Campus Brussels
Tervurenlaan 153 - 1150 Brussels
Contact:
Faculty of Law
Content related: Kalpana Tyagi
Practicalities: Elke Hundhausen
Abstracts
Participants are encouraged to submit a detailed abstract. The paper can concentrate on any aspect of competition, including the recently introduced ECN+ Directive and IP laws. The paper, can for example, focus either on competition law or on IP law or consider the two areas of law simultaneously. Papers discussing the economics of IP and competition law are also highly encouraged.
- Abstracts of about 1000 words with up to 5 main references can be submitted
- Abstracts should contain the methodology used in the paper
- Selection will be merit-based, and all abstracts will be subject to double blind peer review
- Submission of abstracts: 15th January 2022
- Notification of acceptance: 10th February 2022
- Submission of final papers: 1st May 2022
- Date of conference: 23-24 June 2022 (Maastricht University Campus Brussels - hybrid conference, registration will be available as from April)
Our call for abstracts video is available here.
Suggested topics
- The ECN+ Directive
Efficient enforcement is the key to competitive digital markets system. ECN+ Directive promises this through some notable changes in the current enforcement practices. Even though the ECN+ Directive represented views shared by the members of the ECN, very few Memer States met the deadline for the transposition of the Directive into national law. The delay in implementation notwithstanding, ECN+ promises more investigative powers to Member States. Remedies are an important aspect of this power. Contributions on how ECN+ Directive will empower the Member States and facilitate more effective enforcement of EU competition law (both procedural and substantial) are highly encouraged.
- Competition & IP
A discussion on innovation in the digital economy must be complemented by reference to intellectual property laws. Competition and IP relish a very special relationship. The then Commissioner for Competition Mario Monti remarked that the debate in the economic and legal circles has lingered on for long on how to marry the innovation bride with the competition groom. These sessions are an attempt to bring together these two very special fields of EU law. Whereas competition law, at least on the face of it, promises more competition and thereby, more products and services; IP law offers exclusive proprietary rights. The two, however, converge at some point. Exclusionary rights offered by IPRs brings more innovation in the markets. It is this power of innovation that drives the engine of digital markets. Contributions to this session may look at the role of intellectual property law in facilitating the emergence of digital markets and what many call Industry 4.0. Policy papers looking at the interplay between IP, competition and regulation, such as the proposed Digital Services Act and Digital Markets Act and the role of patent and competition law in the FRANDly (Fair, Reasonable and Non-discriminatory) SEP (Standard Essential Patents) debate are highly welcome.
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Exploitative & Exclusionary conduct in the digital world: An economic perspective
The concept exclusionary conduct refers to anti-competitive forms of abuse by dominant undertakings, which leads to foreclosure of competitors. A crucial question, from an economic perspective, is whether foreclosure of competitors also results in actual consumer harm.The concept exploitative conduct refers to practices that can directly harm consumers, such as excessive pricing or unfair trading conditions. The concept has not been applied as much in competition law practice as the classic economic models (focused more on static efficiency). However, more recently competition law scholars and practitioners have started to debate the potential relevance of exploitative abuse in relation to the use of consumer data by digital platforms. While an obvious reference can be made here to the Facebook decision by the German Bundeskartellamt, the discussion in the literature is broader. Does the concept of exploitative conduct in relation to data use make economic sense in the digital world?
Contributions can either reflect on a particular type of exclusionary abuse, for example by providing economic reflections on recent case law at national or EU level, or on the concept of exploitative abuse and its relevance to assess the conduct of the digital undertakings. Of course, a contribution that focuses on the interaction between the different types of abuse (exclusionary, exploitative, and abuses harming the internal market) are also highly welcome.
Scientific Committee
- Caroline Cauffman (Associate Professor, Maastricht University).
- Michael Faure (Professor & Academic Director of the Maastricht European Institute for Transnational Legal Research (METRO), Maastricht University)
- Anselm Kamperman Sanders (Professor IP & Academic Director of the Institute for Globalisation and International Regulation (IGIR), Maastricht University and Deputy Judge, Court of Appeal, Hague).
- Niels Philipsen (Associate Professor Maastricht University and Professor, Rotterdam)
- Kalpana Tyagi (Assistant Professor IP & Competition Law & Managing Coordinator The Innovator’s Legal Aid Clinic, Maastricht University)
December 16, 2021 | Permalink | Comments (0)
Market Entry, Fighting Brands, and Tacit Collusion: Evidence from the French Mobile Telecommunications Market
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Marc Bourreau, Yutec Sun and Frank Verboven |
|
We study a major new entry in the French mobile telecommunications market, followed by the introduction of fighting brands by the three incumbents. Using an empirical oligopoly model, we find that the incumbents' fighting brand strategies are difficult to rationalize as unilateral best responses. Instead, their strategies are consistent with a breakdown of tacit semi-collusion: before entry, the incumbents could successfully coordinate on restricting product variety to avoid cannibalization; after entry, this outcome became harder to sustain because of increased business stealing incentives. Consumers gained considerably from the added variety and, to a lesser extent, from the incumbents' price responses. |
December 16, 2021 | Permalink | Comments (0)
Wednesday, December 15, 2021
100 Years of Rising Corporate Concentration
100 Years of Rising Corporate Concentration
Abstract
We collect data on the size distribution of U.S. corporate businesses for nearly 100 years. We document that corporate concentration (e.g., asset share or sales share of the top 1%) in the U.S. economy has been increasing persistently over the past century. Across different industries, rising concentration was more pronounced in manufacturing, mining, and utilities before 1970s, and more pronounced in services, retail, and wholesale after 1970s. We find that the timing and the degree of rising concentration in an industry align closely with the investment intensity in research and development and information technology. In addition, industries with higher increases in concentration also exhibit higher output growth. The evidence suggests that the long-run trends of rising corporate concentration reflect increasingly stronger economies of scale.
December 15, 2021 | Permalink | Comments (0)
Tuesday, December 14, 2021
On Distributive Justice by Antitrust: The Robin Hood Cartel
Abstract
Equity concerns in antitrust could justify market power in return for a fairer allocation by weighing the consumer welfare of certain disadvantaged groups more heavily. A simple example of an equity-justified agreement illustrates how seeking distributive justice through relaxed antitrust enforcement is ineffective and inefficient. Permitting competitors to jointly set prices gives them the power to price discriminate, which they could use to redistribute wealth by overcharging the rich and giving lower than competitive prices to the poor. Provided society values redistribution enough, such a `Robin Hood cartel' is profitable, despite losing money on the poor and creating deadweight losses. Yet the poor will be given only what is minimally required in return for permission to take from the rich. Without conditions, the joint-profit maximizing wealth redistribution is nothing more than alms for the poor. They receive more under a full-payout plan, but total deadweight losses remain high. In essence, assigning a larger relative consumer welfare weight to the poor discounts the inefficiencies on the rich.
December 14, 2021 | Permalink | Comments (0)
Populism at the FTC Undermines Antitrust Enforcement
I wrote a piece with Abe Wickelgren (U Texas) on how Populism at the FTC Undermines Antitrust Enforcement.
December 14, 2021 | Permalink | Comments (0)
The Importance of Exit via Acquisition to Venture Capital, Entrepreneurship, and Innovation
The Importance of Exit via Acquisition to Venture Capital, Entrepreneurship, and Innovation
Date Written: December 9, 2021
Abstract
Antitrust regulators around the world, including in the UK, have proposed changes to merger review policies that impact how acquisitions of start-ups would be investigated and evaluated. Such changes will likely lead to heightened scrutiny—and increased costs and longer reviews—for many acquisitions, including both horizontal and non-horizontal mergers. In evaluating the merits of such changes, it is critical to take into account the important role that exit via acquisition plays in providing incentives for venture capital (VC) investment and entrepreneurship. This article seeks to provide context for evaluating the effects of such proposed changes. First, it documents the links among VC, entrepreneurship, and innovation, and how exit via acquisition can foster dynamic innovation, one of the stated goals of the CMA. Second, it identifies additional consumer benefits derived from acquisitions of small companies by larger companies. Third, it describes VC investment in the UK, including the favourable, yet fragile, position that the UK holds as a VC hub for continental Europe. Finally, it documents the recent increased diversity in VC investment and entrepreneurship in the UK, which could be curbed by the proposed changes.
December 14, 2021 | Permalink | Comments (0)
'Competition Overdose': Curing Markets from Themselves? Ten Points for Discussion
'Competition Overdose': Curing Markets from Themselves? Ten Points for Discussion
The times when competition policy was perceived as an axiomatic, mathematised, highly technical and pretty much non-controversial area of Law & Economics have gone. Over the last decade, competition has become a great theme again. Full of ideological appeals and statements, mindful of their political pedigree, competition law, economics and policy are transitioning from the mechanistic field of microeconomic modelling to the real world of geopolitical chessboards.
The new book by two prominent competition law thinkers Maurice E. Stucke and Ariel Ezrachi ‘Competition Overdose: How Free Market Mythology Transformed Us from Citizen Kings to Market Servants’ (Harper Business, USA, 2020, pp. 402) has triggered a vivid discussion over the ever-fading question on the goals of competition law, economics and policy and – more broadly – on the very nature of the multifaceted phenomenon of competition. The book provokes not only thoughts. From its very title, subtitle, name of chapters, normative position, methodological argumentation and the choice of preprint reviewers, across the selection of case studies and to its very writing style, the book is designed to generate discussion. And for the right reasons. The authors aim to raise (or perhaps to refine) the ethical dimension in the otherwise morally neutral phenomenon of economic competition and its regulation.
In what follows I articulate ten points for discussion, written as a reflection on the book. The main focus is on analysing the phenomenon of economic competition, and on the ways how this phenomenon should (and should never) be regulated.
December 14, 2021 | Permalink | Comments (0)
