Competition Corner by Alden Abbott - Spooky Thinking Continues to Haunt Antitrust Enforcement – Be Afraid
Greetings fellow travelers, and happy spooky season from all of us at the Mercatus Center competition team. Perhaps the spookiest thing is the bad economic thinking that still haunts highly publicized federal agency antitrust initiatives.
Determined to raise populist Neo-Brandeisian antitrust from its grave, the FTC continues to tout the draft FTC-DOJ merger guidelines that provide little guidance and even less accurate summation of the law – as my colleagues and I have argued. Consumers should be afraid.
Of course, not everyone thinks so. I recently wrote a Truth on the Market response to Professor John Kwoka of Northeastern University, who worked on the guidelines and claimed that they “return antitrust to a sound economic and legal foundation.” With due respect to him, the draft guidelines, if adopted, would do anything but that. They would instead harm the American economy by creating costly uncertainty and discouraging merger proposals that benefit consumers and increase welfare.
The FTC is also pressing ahead with its lawsuit against Amazon over a range of allegedly anti-competitive business practices, many of which benefit consumers by allowing the tech firm to achieve the scale and user experience it needs to make it what it is. I discussed the Amazon complaint in a Truth on the Market commentary that explains why it may be “Perhaps the Greatest Affront to Consumer and Producer Welfare in Antitrust History.” For a comprehensive analysis of the FTC’s Amazon case and its legal merits (or lack thereof), check out the piece that my colleague Satya Marar and Mercatus Center MA Fellow Rishab Sardana co-authored for Discourse Magazine. Among other things, Marar and Sardana explain that far from benefiting consumers, this case, if it “succeeded,” could make your packages more expensive.
There is, of course, another blockbuster antitrust case currently being pursued – the Justice Department’s monopolization suit against Google, which was defended recently by former Attorney General William Barr in a Wall Street Journal op-ed. Our colleague, George Mason Economics Professor Donald Boudreaux, lays out the deficiencies in Barr’s analysis in a Café Hayek column, “The Antitrust Action Against Google Isn’t Justified.” And Mercatus Center Visiting Scholar Greg Werden assesses the efficiencies underlying Google’s payments to third parties to grant its search engine default status in a Truth on the Market commentary, “Shining the Light of Economics on the Google Case.”
Switching gears, I will be busy on the speaker circuit in November.
On November 14, I will moderate a panel on standard essential patents at IPWatchdog’s Fifth Annual Standards, Patents & Competition program.
On November 16, I will participate on a panel focused on artificial intelligence and antitrust, at the 8th Annual Global Antitrust Economics Conference, co-sponsored by Concurrences and NYU’s Stern School of Business.
And in late November, I will be moderating a podcast conversation between Greg Werden and Professor Herbert Hovenkamp – whose renowned antitrust treatise has been cited in countless lower court and Supreme Court opinions. Greg and Professor Hovenkamp will be discussing what is the appropriate standard (consumer welfare or competitive process) to guide American antitrust enforcement – an important topic indeed. The edited podcast will be released in the near future.
That’s all from us for this month, but stay tuned and watch this space for what’s to come… especially if, like me, you’re intrigued by the specter of artificial intelligence and its implications for the competition and antitrust world. My colleague Satya Marar has something specific in the works, and I expect that the Mercatus competition team will become a major player in this area shortly (a lot more to come).