With Friends Like These..: Competition Corner by Alden Abbott
Issue #26
G’day,
An interesting write-up in this week’s Wall Street Journal described the growing praise that FTC Chair Khan is receiving from the populist right side of politics for her Neo-Brandeisian, anti-big business approach to antitrust. From J.D. Vance to Matt Gaetz and Josh Hawley, a small albeit growing number of republican policymakers (dubbed “Khanservatives”) commend the Biden Administration FTC for holding companies’ feet to the fire in the name of achieving social policy objectives. The two camps make strange bedfellows. The current FTC’s social policy objectives include, among others, the promotion of Environmental and Social Governance (ESG) goals, based upon second request questions that the agency has issued to companies as part of proposed merger inquiries in recent years. Odd couplings aside, it is clear that those who stand to lose the most from these developments are consumers. I have previously written about how the conflation of economic competition with extraneous social and policy goals or targeting businesses for achieving a certain size undermines the rule of law and threatens to destroy trillions of dollars in economic value.
My Forbes Columns: Techlash, Artificial Intelligence, the DOJ’s Apple lawsuit, & More.
This month, I became a regular contributor and columnist at Forbes. I intend to use the platform to analyze the latest developments in antitrust enforcement and what they mean for all of us.
Big Internet Platforms Face US Antitrust Threats: An overview of the Biden administration DOJ/FTC’s European Union-style pursuit of tech platforms for abusing their purported market “dominance” and “gatekeeper” status.
Why Antitrust Regulators are Focused on Problematic AI Algorithms: Firms are increasingly relying on software algorithms to recommend prices, with the use of AI making it easier to forecast demand, but also potentially easier for firms to tacitly fix prices and harm consumers. Enforcers and policymakers should not inadvertently proscribe beneficial pro-competition business conduct in their pursuit of nefarious practices. (I also highly recommend my colleague Satya Marar’s primer on AI and Antitrust, which canvasses these and other issues, and is among the most downloaded research papers on Social Science Research Network in the antitrust and tech regulation categories since its release.)
U.S. V. Apple Lawsuit Could Affect American Competition And Innovation: Though it is unlikely to succeed, consumers and innovation stand to be harmed in the DOJ’s recent lawsuit against Apple. What the DOJ describes as anticompetitive practices are often the same ones that have made the Apple/iPhone user experience what it is, and it is hard to see consumers gaining much from forcing Apple to design its products more like those of its competitors, including Android. I’ve also written an analysis of the lawsuit for Truth on The Market.
China’s Continuing Market Distortions Deserve A New Kind Of Response: The Chinese government propagates protectionist policies that artificially advantage domestic firms while harming foreign companies and workers. These Anti-Competitive Market Distortions (ACMDs) warrant a firm, multilateral response. I’ve previously co-authored a book on Trade Liberalisation, Competitive Markets and Property Rights Protection with Shanker Singham.
The World of Mergers
There is a lot going on in the world of mergers and acquisitions, with the enforcement agencies investigating or attempting to block multiple high-profile deals. My colleague Satya Marar provides a comprehensive law & economics analysis of the proposed merger between financial companies Capital One and Discover, and its implications for consumers, in Truth on the Market. I have also written about the FTC’s attempt to scupper the merger of Kroger and Albertsons supermarkets.
That rounds off a busy month for us here at the Mercatus Center project on competition. Until next time!