Consumer Protection Law Commons^™

A Reputational View Of Antitrust’S Consumer Welfare Standard, Murat C. Mungan, John M. Yun

Faculty Scholarship

A reform movement is underway in antitrust. Citing prior enforcement failures, deviations from the original intent of the antitrust laws, and overall rising levels of sector concentration, some are seeking to fundamentally alter or altogether replace the current consumer welfare standard, which has guided courts over the past fifty years. This policy push has sparked an intense debate over the best approach to antitrust law enforcement. In this Article, we examine a previously unexplored potential social cost from moving away from the consumer welfare standard: a loss in the information value to the public from a finding of liability. A …

Gamestopped: How Robinhood’S Gamestop Trading Halt Reveals The Complexities Of Retail Investor Protection, Neal Newman

Faculty Scholarship

Should brokers have the unfettered right to restrict investor trading? GameStop, a brick-and-mortar video game retailer, had been experiencing declining revenues since 2016. However, GameStop saw its share price climb almost 1000 percent in the span of a one- week period from January 21, 2021 to January 27, 2021 due to retail investors buying significant amounts of GameStop shares during that period. Melvin Capital, a hedge fund, ended up losing billions as they were betting that GameStop shares would lose value instead of increase—a practice referred to as short selling. On January 28, 2021, brokers inexplicably halted trading on GameStop …

At The Nexus Of Antitrust & Consumer Protection, Luke Herrine

Articles

This Essay uses Section 5 of the Federal Trade Commission Act to examine the theoretical and practical relationship between antitrust and consumer protection law. It argues that, since roughly 1980, there has been a hegemonic "neoliberal"framework, one that has in recent years been challenged by an emerging "moral economy" framework. The neoliberal framework conceptualizes antitrust as preventing firms from conspiring to throttle output, with a focus primarily on consumers' interests in low prices, and consumer protection as making consumers informed, rational, and able to switch between competitors with relatively low cost. The moral economy framework conceptualizes both areas of law …

Title Theft, Stewart E. Sterk

Faculty Articles

Real property owners across the country have been targeted by scammers who prepare deeds purporting to convey title to property the scammers do not own. Sometimes, the true owners are entirely unaware of these bogus transfers. In other instances, the scammers use misrepresentation to induce unsophisticated owners to sign documents they do not understand.

Property doctrine protects owners against forgery and fraud—the primary vehicles scammers use in their efforts to transfer title. Owners enjoy protection not only against the scammers themselves, but generally against unsuspecting purchasers to whom the scammers transfer purported title.

Recovery of title, however, involves costs and …

Amazon's Pricing Paradox, Rory Van Loo, Nikita Aggarwal

Faculty Scholarship

Antitrust scholars have widely debated the apparent paradox of Amazon seemingly wielding monopoly power while offering low prices to consumers. A single company’s behavior thereby helped spark an intellectual renaissance as scholars debated why Amazon’s prices were so low, whether antitrust enforcers should intervene, and, eventually, how the field should be reformed for the era of large online platforms. One of the few things that all parties have agreed upon amidst those contentious conversations is that Amazon offers low prices. This Article challenges that assumption by demonstrating that Amazon charges higher prices than commonly understood. More importantly, unraveling the disconnect …

Coercive Rideshare Practices: At The Intersection Of Antitrust And Consumer Protection Law In The Gig Economy, Christopher L. Peterson, Marshall Steinbaum

Utah Law Faculty Scholarship

This Essay considers antitrust and consumer protection liability for coercive practices vis-à-vis drivers that are prevalent in the rideshare industry. Resale price maintenance, nonlinear pay practices, withholding data, and conditioning data access on maintaining a minimum acceptance rate all curtail platform competition, sustaining a high-price, tacitly collusive equilibrium among the few incumbents. Moreover, concealing relevant trip data from drivers is both deceptive and unfair when the platforms are in full possession of the relevant facts. In the absence of these coercive practices, customers too would be better off due to platform competition, which would lower average prices by sharpening competition …

Q&A With Lina Khan, Chair Of The U.S. Federal Trade Commission And Mark Glick, Professor Of Economics At The University Of Utah, Lina M. Khan

Faculty Scholarship

Let me tell you a little about Lina. Lina attended Yale Law school and while a third-year law student she wrote her famous and influential article Amazon’s Anti-Trust Paradox. Then, after graduating from law school, she worked as the legal director at the Open Markets Institute and during that period she continued to write a large number of influential antitrust papers. She then joined the faculty of my alma mater, Columbia Law School. In 2019, she was appointed as counsel to the U.S. House Judiciary Subcomittee on Antitrust, Commercial, and Administrative Law and, in 2021, President Biden appointed her …

Dynamic Pricing Algorithms, Consumer Harm, And Regulatory Response, Alexander Mackay, Samuel Weinstein

Faculty Articles

Pricing algorithms are rapidly transforming markets, from ride-sharing, to air travel, to online retail. Regulators and scholars have watched this development with a wary eye. Their focus so far has been on the potential for pricing algorithms to facilitate explicit and tacit collusion. This Article argues that the policy challenges pricing algorithms pose are far broader than collusive conduct. It demonstrates that algorithmic pricing can lead to higher prices for consumers in competitive markets and even in the absence of collusion. This consumer harm can be initiated by a single firm employing a superior pricing algorithm. Higher prices arise from …

Antitrust Liability For False Advertising: A Response To Carrier & Tushnet, Susannah Gagnon, Herbert J. Hovenkamp

All Faculty Scholarship

This reply briefly considers when false advertising can give rise to antitrust liability. The biggest difference between tort and antitrust liability is that the latter requires harm to the market, which is critically dependent on actual consumer response. As a result, the biggest hurdle a private plaintiff faces in turning an act of false advertising into an antitrust offense is proof of causation – to what extent can a decline in purchase volume or other market rejection be specifically attributed to the defendant’s false claims? That requirement dooms the great majority of false advertising claims attacked as violations of the …

Addictive Technology And Its Implications For Antitrust Enforcement, James Niels Rosenquist, Fiona M. Scott Morton, Samuel N. Weinstein

Faculty Articles

The advent of mobile devices and digital media platforms in the past decade represents the biggest shock to cognition in human history. Robust medical evidence is emerging that digital media platforms are addictive and, when used in excess, harmful to users’ mental health. Other types of addictive products, like tobacco and prescription drugs, are heavily regulated to protect consumers. Currently, there is no regulatory structure protecting digital media users from these harms. Antitrust enforcement and regulation that lowers entry barriers could help consumers of social media by increasing competition. Economic theory tells us that more choice in digital media will …

Deceive, Profit, Repeat: Public Deception Schemes To Conceal Product Dangers, Wes Henricksen

Faculty Scholarship

No abstract provided.

Vertical Merger Enforcement Actions: 1994–April 2020, Steven C. Salop, Daniel P. Culley

Georgetown Law Faculty Publications and Other Works

We have revised our earlier listing of vertical merger enforcement actions by the Department of Justice and Federal Trade Commission since 1994. This revised listing includes 66 vertical matters beginning in 1994 through April 2020. It includes challenges and certain proposed transactions that were abandoned in the face of Agency concerns. This listing can be treated as an Appendix to Steven C. Salop and Daniel P. Culley, Revising the Vertical Merger Guidelines: Policy Issues and an Interim Guide for Practitioners, 4 JOURNAL OF ANTITRUST ENFORCEMENT 1 (2016).

What’S In Your Wallet (And What Should The Law Do About It?), Natasha Sarin

All Faculty Scholarship

In traditional markets, firms can charge prices that are significantly elevated relative to their costs only if there is a market failure. However, this is not true in a two-sided market (like Amazon, Uber, and Mastercard), where firms often subsidize one side of the market and generate revenue from the other. This means consideration of one side of the market in isolation is problematic. The Court embraced this view in Ohio v. American Express, requiring that anticompetitive harm on one side of a two-sided market be weighed against benefits on the other side.

Legal scholars denounce this decision, which, …

Apple V. Pepper: Rationalizing Antitrust’S Indirect Purchaser Rule, Herbert J. Hovenkamp

All Faculty Scholarship

In Apple v. Pepper the Supreme Court held that consumers who allegedly paid too much for apps sold on Apple’s iStore could sue Apple for antitrust damages because they were “direct purchasers.” The decision reflects some bizarre complexities that have resulted from the Supreme Court’s 1977 decision in Illinois Brick, which held that only direct purchasers could sue for overcharge injuries under the federal antitrust laws. The indirect purchaser rule was problematic from the beginning. First, it was plainly inconsistent with the antitrust damages statute, which gives an action to “any person who shall be injured in his business …

Occupational Licensing And The Limits Of Public Choice Theory, Gabriel Scheffler, Ryan Nunn

All Faculty Scholarship

Public choice theory has long been the dominant lens through which economists and other scholars have viewed occupational licensing. According to the public choice account, practitioners favor licensing because they want to reduce competition and drive up their own wages. This essay argues that the public choice account has been overstated, and that it ironically has served to distract from some of the most important harms of licensing, as well as from potential solutions. We emphasize three specific drawbacks of this account. First, it is more dismissive of legitimate threats to public health and safety than the research warrants. Second, …

Coty, Amazon, And The Future Of Vertical Restraints: Evolving Distribution Norms On Both Atlantic Shores, Chris Sagers

Law Faculty Articles and Essays

No abstract provided.

Antitrust And Consumer Protection, Leslie Sara Hyman, Matthew J. Mcgowan

Student Scholarship

Consumer welfare is the common concern of the antitrust laws, the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA), the Texas Insurance Code (TIC), and various other statutes prohibiting fraudulent conduct in dealing with consumers. Antitrust laws, however, primarily address the misuse of market power to harm consumers, while anti-deception statutes focus on consumer harm brought about through

deception and a litany of other unlawful practices. The antitrust laws and the anti-fraud statutory schemes therefore are best viewed as focusing on complementary aspects of consumer welfare.

This article covers significant developments under federal and Texas antitrust laws and consumer protection laws …

The Tethered Economy, Aaron K. Perzanowski, Chris Jay Hoofnagle, Aniket Kesari

Faculty Publications

Imagine a future in which every purchase decision is as complex as choosing a mobile phone. What will ongoing service cost? Is it compatible with other devices you use? Can you move data and applications across de- vices? Can you switch providers? These are just some of the questions one must consider when a product is “tethered” or persistently linked to the seller. The Internet of Things, but more broadly, consumer products with embedded software, are already tethered. While tethered products bring the benefits of connection, they also carry its pathologies. As sellers blend hardware and software—as well as product …

Platforms, American Express, And The Problem Of Complexity In Antitrust, Chris Sagers

Law Faculty Articles and Essays

Everything about Ohio v. American Express was wrong and the adoption of “two-sided platform” reasoning into American antitrust law might be one of its worst, most regrettable wrong turns in decades. That is not because the original theoretical model of two-sided interaction has anything wrong with it at all. It is rather that nothing could be gained by incorporating it that could be worth the result in the American Express case itself, or the difficulty that has likely been invited into antitrust litigation. The consequences are hard to predict, but they may be severely limiting to our already moribund antitrust …

Privacy's Law Of Design, Ari Ezra Waldman

Articles & Chapters

Privacy by design is about making privacy part of the conception and development of new data collection tools. But how should we interpret “privacy by design” as a legal mandate? As it transitions from an academic buzzword into binding law, privacy by design will, for the first time, impose real responsibilities on real people to do specific things at specific times. And yet, there remains significant disagreement about what privacy by design actually means in practice: we have yet to define its who, what, when, why, and how. Different approaches to privacy by design have tried to answer those questions …

Blind Spot: The Attention Economy And The Law, Tim Wu

Faculty Scholarship

Human attention, valuable and limited in supply, is a resource. It has become commonplace, especially in the media and technology industries, to speak of an "attention economy" and of competition in "attention markets.” There is even an attentional currency, the "basic attention token," which purports to serve as a medium of exchange for user attention. Firms like Facebook and Google, which have emerged as two of the most important firms in the global economy, depend nearly exclusively on attention markets as a business model.

Yet despite the well-recognized commercial importance of attention markets, antitrust and consumer protection authorities have struggled …

Revising The Vertical Merger Guidelines (Ftc Hearings), Steven C. Salop

Georgetown Law Faculty Publications and Other Works

This slide deck was the author’s presentation at the FTC Hearings on Vertical Mergers (November 1, 2018). The deck sets out a summary of the author’s economic analysis and proposed revisions to the U.S. Vertical Merger Guidelines.

The Politics Of Professionalism: Reappraising Occupational Licensure And Competition Policy, Sandeep Vaheesan, Frank A. Pasquale

Faculty Scholarship

No abstract provided.

Peeling Back The Student Privacy Pledge, Alexi Pfeffer-Gillett

Scholarly Articles

Education software is a multi-billion dollar industry that is rapidly growing. The federal government has encouraged this growth through a series of initiatives that reward schools for tracking and aggregating student data. Amid this increasingly digitized education landscape, parents and educators have begun to raise concerns about the scope and security of student data collection.

Industry players, rather than policymakers, have so far led efforts to protect student data. Central to these efforts is the Student Privacy Pledge, a set of standards that providers of digital education services have voluntarily adopted. By many accounts, the Pledge has been a success. …

The Raising Rivals' Cost Foreclosure Paradigm, Conditional Pricing Practices, And The Flawed Incremental Price-Cost Test, Steven C. Salop

Georgetown Law Faculty Publications and Other Works

There are two overarching legal paradigms for analyzing exclusionary conduct in antitrust – predatory pricing and the raising rivals’ costs characterization of foreclosure. Sometimes the choice of paradigm is obvious. Other times, it may depend on the structure of the plaintiff’s allegations. Some types of conduct, notably conditional pricing practices (CPPs), might appear by analogy to fit into both paradigms. CPPs involve pricing that is conditioned on exclusivity or some other type of favoritism in a customer’s purchases or input supplier’s sales. The predatory pricing paradigm would attack the low prices of CPPs. By contrast, the RRC foreclosure paradigm would …

Why Intra-Brand Dealer Competition Is Irrelevant To The Price Effects Of Tesla's Vertical Integration, Daniel A. Crane

Articles

"In recent years, Tesla Motors (recently renamed Tesla) has been engaged in a state-by-state ground way for the right to distribute it’s all-electric vehicles directly to consumers. The car dealers' lobby, with the political backing of General Motors, has fiercely battled back, relying on decades-old state dealer protection laws to argue that Tesla is legally bound to distribute through franchised dealers. Through a combination of favorable state legislative and judicial decisions, Tesla has won the right to distribute directly in many states, but remains categorically barred from direct distribution in important states like Michigan and Texas--and hence all direct distribution …

The Failed Superiority Experiment, Christine P. Bartholomew

Journal Articles

Federal law requires a class action be “superior to alternative methods for fairly and efficiently adjudicating the controversy.” This superiority requirement has gone unstudied, despite existing for half a century. This Article undertakes a comprehensive review of the superiority case law. It reveals a jurisprudence riddled with inconsistency as courts adopt diametrically opposed interpretations of the requirement. Originally crafted to encourage predictable, consistent class action decisions, superiority has mutated over the years into a dangerous wild card—subjectively used to stymie aggregate litigation. The solution is not adding a new requirement to the already onerous rules for class certification. Instead, judges …

Antitrust And Intellectual Property: A Brief Introduction, Keith N. Hylton

Faculty Scholarship

Intellectual property law and antitrust have been described as conflicting bodies of law, and the reason is easy to see. Antitrust law aims to protect consumers from the consequences of monopolization. Intellectual property law seeks to enhance incentives to innovate by granting monopolies in ideas or expressions of ideas. The purpose of this chapter is to explore the purported conflict between antitrust and intellectual property. The chapter is largely descriptive, and focuses on current or developing litigation rather than historical controversies. Many of the modern examples of conflict can be attributed to problems of classification.

Revising The U.S. Vertical Merger Guidelines: Policy Issues And An Interim Guide For Practitioners, Steven C. Salop, Daniel P. Culley

Georgetown Law Faculty Publications and Other Works

Mergers and acquisitions are a major component of antitrust law and practice. The U.S. antitrust agencies spend a majority of their time on merger enforcement. The focus of most merger review at the agencies involves horizontal mergers, that is, mergers among firms that compete at the same level of production or distribution.

Vertical mergers combine firms at different levels of production or distribution. In the simplest case, a vertical merger joins together a firm that produces an input (and competes in an input market) with a firm that uses that input to produce output (and competes in an output market). …

Predatory Pricing Under The Areeda-Turner Test, Herbert J. Hovenkamp

All Faculty Scholarship

Few works of legal scholarship have had the impact enjoyed by Areeda and Turner's 1975 article on predatory pricing. Proof of predatory pricing under the Areeda-Turner test requires two things. The plaintiff must show a market structure such that the predator could rationally foresee "recouping the losses through higher profits earned in the absence of competition." This requirement, typically called "recoupment," requires the plaintiff to show that, looking from the beginning of the predation campaign, the predator can reasonably anticipate that the costs of predation will be more than offset by the present value of a future period of monopoly …