Law Commons^™

Fixing "Litigating The Fix", Steven C. Salop, Jennifer E. Sturiale

Georgetown Law Faculty Publications and Other Works

Merging firms have increasingly been asking trial courts to adjudicate their merger “as remedied” by a voluntary “fix.” These are remedies that have been rejected by (or never proposed to) the agency. This procedure is known as Litigating-the-Fix” (“LTF”). This article proposes a judicial procedure for managing cases in which the merging parties attempt to LTF. Our recommendations flow from a decision theory approach informed by the relevant LTF case law, the merger enforcement record, the language and goals of Section 7, and an economic analysis of the incentives of the parties and agencies created by LTF. Our recommendation addresses …

Cookies, Pop-Ups And Commercials: How Tech Companies' Privacy Promises Are Preserving Their Data Dominance, Cailley Lapara

Capstones

As antitrust sentiment focused on Big Tech from regulators and consumers grows, companies like Google and Apple and more have announced plans to move away from the behavioral ad business model that brought the companies to the size they are today. This trend is marketed to customers as a way to address their growing concerns over privacy and data collection. It also comes as the companies face sweeping antitrust litigation and legislation that would break up the firms. But the companies' claims of moving towards privacy are sketchy at best, and appear to serve as a way for the companies …

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 …

On The Misuse Of Regressions Of Price On The Hhi In Merger Review, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

The article explains why regressions of price on HHI should not be used in merger review. Both price and HHI are equilibrium outcomes determined by demand, supply, and the factors that drive them. Thus, a regression of price on the HHI does not recover a causal effect that could inform the likely competitive effects of a merger. Nonetheless, economic theory is consistent with the legal presumption that a merger is likely to have adverse competitive effects if it occurs in a concentrated market and makes that market more concentrated.

Antitrust Class Actions In The Wake Of Procedural Reform, Christine P. Bartholomew

Indiana Law Journal

What is the current vitality of antitrust enforcement? Antitrust class actions—the primary mode of competition oversight—has weathered two decades of procedural reform. This Article documents the effects of those reforms. Relying on an original dataset of over 1300 antitrust class action settlements, this Article finds such cases alive but far from well. Certain suits do succeed on an impressive scale, returning billions of dollars to victims. But class action reform has made antitrust enforcement narrower, more time-consuming, and costlier than only a decade ago. And, as this Article’s sources reveal, new battle lines are forming. Across the political spectrum, people …

Optimal Standards Of Proof In Antitrust, Murat C. Mungan, Joshua Wright

Faculty Scholarship

Economic analyses of antitrust institutions have thus far focused predominantly on optimal penalties and the design of substantive legal rules, and have largely ignored the standard of proof used in trials as a policy tool in shaping behavior. This neglected tool can play a unique role in the antitrust context, where a given firm may have the choice to engage in exceptional anticompetitive or procompetitive behavior, or simply follow more conventional business practices. The standard of proof used in determining the legality of a firm’s conduct affects not only whether the firm chooses to engage in pro- versus anticompetitive behavior, …

Big Tech Is Why I Have (Anti)Trust Issues, Sophie Copenhaver

St. John's Law Review

(Excerpt)

“There is a cost to bigness, even if it’s not passed onto the consumer.” Antitrust laws were once an effective tool to break up companies that had grown too large. However, subsequent rulings have altered their original meaning, and they are no longer useful in regulating large technology companies such as Amazon, Facebook, and Google. This Note will argue that judicial interpretation of antitrust laws should no longer be governed by the consumer welfare standard. Rather, judges should apply a two-part test, focusing on the market power and any anticompetitive business practices of the defendant corporation.

Selling Antitrust, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust enforcers and its other defenders have never done a good job of selling their field to the public. That is not entirely their fault. Antitrust is inherently technical, and a less engaging discipline to most people than, say, civil rights or criminal law. The more serious problem is that when the general press does talk about antitrust policy it naturally gravitates toward the fringes, both the far right and the far left. Extreme rhetoric makes for better press than the day-to-day operations of a technical enterprise. The extremes are often stated in overdramatized black-and-white terms that avoid the real …

President Biden's Executive Order On Competition: An Antitrust Analysis, Herbert J. Hovenkamp

All Faculty Scholarship

In July, 2021, President Biden signed a far ranging Executive Order directed to promoting competition in the American economy. This paper analyzes issues covered by the Order that are most likely to affect the scope and enforcement of antitrust law. The only passage that the Executive Order quoted from a Supreme Court antitrust decision captures its antitrust ideology well – that the Sherman Act:

rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time …

Anticompetitive Merger Review, Samuel N. Weinstein

Faculty Articles

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 …

Criminal Enforcement Of Section 2 Of The Sherman Act: An Empirical Assessment, Daniel A. Crane

Law & Economics Working Papers

The Biden Justice Department has announced that it may begin to bring criminal monopolization cases under Section 2 of the Sherman Act, a practice that the Department has not employed in almost half a century. The Department's leadership has justified this idea by asserting that it used to be common practice for the Antitrust Division to bring such cases. This Article presents the findings of an empirical study of all of the Justice Department's antitrust case filings. It finds that the Justice Depart brought 175 criminal monopolization cases between 1903 and 1977, but that only 20 of these involved unilateral …

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 …

A New Antitrust Framework To Protect Mom And Pop From Big Tech, Cara Macdonald

Journal of the National Association of Administrative Law Judiciary

While the economy declined during the COVID-19 pandemic, big technology companies like Amazon and Oracle experienced unprecedented growth and influence. Critics argue big technology companies are finding this level of success in-part due to anticompetitive practices. The crux of the debate rests on whether current, traditional antitrust laws are sufficient to cope with big technology companies. Some theorists argue that current laws are adequate, while others assert that antitrust laws are insufficient to regulate big technology companies because they are so different from the types of companies antitrust laws were designed to regulate. This article concludes that big tech companies …

Ftc V. Qualcomm And The Need To Reboot Antitrust Goals, Beatriz Del Chiaro Da Rosa

University of Miami Business Law Review

The antitrust community is facing a demanding question: Is antitrust enforcement ultimately about protecting consumers, competition, or both? This question has sparked debates about the ultimate goals of antitrust law. On one side of the debate, supporters of the consumer welfare standard; and on the other side, supporters of the Neo-Brandeisian standard of enforcement. At this crucial time in the debate of overarching antitrust goals, the Ninth Circuit’s holding in Federal Trade Commission v. Qualcomm Incorporated, one of the most important antitrust cases in the twenty-first century, poses many issues for the consumer welfare standard and antitrust enforcement in the …

Probing For Holes In The 100-Year-Old Baseball Exemption: A New Post-Alston Challenge, Sam C. Ehrlich

University of Cincinnati Law Review

As professional baseball’s unique exemption to antitrust law celebrates its one-hundredth year of existence, it faces a new attack in Nostalgia Partners v. Office of the Commissioner of Baseball, a claim by a group of minor league owners shut out of MLB’s recent restructuring of its minor league affiliate system. While the baseball exemption has weathered dozens of similar challenges over the past century, the Nostalgia Partners plaintiffs claim that circumstances on the Supreme Court have changed enough that the justices would be willing to overturn or narrow the exemption in their favor. This claim rests with the Court’s …

Antitrust Philosophy And Its Impact On Rural Industry, Logan Gary Johnson

Honors Thesis

The United States is a nation steeped in values, and tradition. One of these values has always been the preservation of competition in the pursuit of liberty. The philosophical backing of America’s founding can be traced back to a handful of European thinkers, most notably John Locke. The connection between Locke, America’s founding, and continued struggles with antitrust enforcement are worthy of exploration. Though likely unintentional, rural communities have been left to deal with the impacts of weak antitrust enforcement in a number of key sectors. Chief of which is Agriculture. Consolidation is the new norm, with each stage of …

Digital Cluster Markets, Herbert J. Hovenkamp

All Faculty Scholarship

This paper considers the role of “cluster” markets in antitrust litigation, the minimum requirements for recognizing such markets, and the relevance of network effects in identifying them.

One foundational requirement of markets in antitrust cases is that they consist of products that are very close substitutes for one another. Even though markets are nearly always porous, this principle is very robust in antitrust analysis and there are few deviations.

Nevertheless, clustering noncompeting products into a single market for purposes of antitrust analysis can be valuable, provided that its limitations are understood. Clustering contributes to market power when (1) many customers …

Rebuilding Platform Antitrust: Moving On From Ohio V. American Express, Steven C. Salop, Daniel Francis, Lauren Sillman, Michaela Spero

Georgetown Law Faculty Publications and Other Works

Now that the immediate fallout from the Supreme Court’s blockbuster Amex decision has cooled, this Article aims to give a first draft of its place in antitrust history and to offer a roadmap for the next stage of the evolution of platform antitrust analysis. We focus on several issues that have not been fully analyzed in the literature. First, we argue that, rather than mangling the law of market definition, the Court should have explicitly permitted multi-market balancing of effects across the separate markets in which the platform was active. Second, we propose standards to implement such balancing in cases …

Sovereignty 2.0, Anupam Chander, Haochen Sun

Vanderbilt Journal of Transnational Law

Digital sovereignty-the exercise of control over the internet-is the ambition of the world's leaders, from Australia to Zimbabwe, seen as a bulwark against both foreign states and foreign corporations. Governments have resoundingly answered first-generation internet law questions of who, if anyone, should regulate the internet. The answer: they all will. Governments now confront second-generation questions--not whether, but how to regulate the internet. This Article argues that digital sovereignty is simultaneously a necessary incident of democratic governance and democracy's dreaded antagonist. As international law scholar Louis Henkin taught, sovereignty can insulate a government's worst ills from foreign intrusion. Assertions of digital …

Megacorporations Are Jacking Up Prices 'Because They Can,' Pushing Red-Hot Inflation To Historic Levels, Robert H. Lande

All Faculty Scholarship

This article argues that corporations may be taking advantages of supply chain bottlenecks and shortages to collude and raise prices illegally. Although price fixing is illegal, the current levels of penalties are far too low. This gives firms an incentive to collude. Before the pandemic, when inflation was low, consumers and the antitrust enforcers would have been more likely to notice any sudden price increases and investigate whether they were caused by collusion. But using bottlenecks and shortages as cover, companies can take advantage of their years of consolidation and collude more easily with less chance of it being detected. …

Note: Trust In The Digital Marketplace: Amazon, Third-Party Sellers, And Informational Fiduciaries, Jesse-Paul Crane

Notre Dame Journal on Emerging Technologies

The rise of e-commerce has created a number of online marketplaces where digital platforms connect buyers and sellers. Consumers use platforms like Amazon, Etsy, Instacart, Uber, Lyft, and Airbnb to purchase goods and services from third parties while the platform itself takes a fee for operating the marketplace. Online platforms are not the only businesses that use such a “two-sided” marketplace model. The Supreme Court recently addressed antitrust concerns in this type of marketplace in Ohio v. Am. Express Co. 1 Two-sided markets invoke a number of novel legal issues that impact both those who buy and sell over them, …

The Progressives' Antitrust Toolbox, Herbert J. Hovenkamp

All Faculty Scholarship

The period 1900 to 1930 was the Golden Age of antitrust theory, if not of enforcement. During that period courts and scholars developed nearly all of the tools that we use to this day to assess anticompetitive practices under the federal antitrust laws. In subsequent years antitrust policy veered to both the left and the right, but today seems to be returning to a position quite similar to the one that these Progressive adopted. Their principal contributions were (1) partial equilibrium analysis, which became the basis for concerns about economic concentration, the distinction between short- and long-run analysis, and later …

Monopolizing Digital Commerce, Herbert J. Hovenkamp

All Faculty Scholarship

Section 2 of the Sherman Act condemns firms who “monopolize,” “attempt to monopolize,” or “combine or conspire” to monopolize—all without explanation. Section 2 is the antitrust law’s only provision that reaches entirely unilateral conduct, although it has often been used to reach collaborative conduct as well. In general, § 2 requires greater amounts of individually held market power than do the other antitrust statutes, but it is less categorical about conduct. With one exception, however, the statute reads so broadly that criticisms of the nature that it is outdated cannot be based on faithful readings of the text.

The one …

Facebook, Welfare, And Natural Monopoly: A Quantitative Analysis Of Antitrust Remedies, Felix B. Chang, Seth Benzell

Faculty Articles and Other Publications

This Article advances a novel theoretical model for assessing policy interventions against Facebook. As prosecutors barrel forward against digital platforms, soon it will fall upon courts and, eventually, regulators to devise remedies. We argue that any sensible solution must include quantification of the welfare effects on the platform’s various constituents. Our model prioritizes the effects upon total societal welfare—or, in economists’ terms, social welfare. Applied to Facebook, the model calculates social welfare as the sum of four components: (i) consumer welfare; (ii) advertising profits; (iii) tax revenues; and (iv) the value of a large user base.

Drawing on surveys of …

Anticompetitive Merger Review, Samuel N. Weinstein

Georgia Law Review

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 …

Returning To The Statutory Text: Why The Language Of Section 13(B) Requires Courts To Narrowly Construe The Ftc’S Ability To Obtain Injunctive Relief, Christopher Halm

Fordham Journal of Corporate & Financial Law

The Federal Trade Commission (FTC) enforces over 70 laws in the areas of antitrust and consumer protection, and one valuable tool to support their enforcement is Section 13(b) of the Federal Trade Commission Act (“Section 13(b)”). Section 13(b), among other features, grants the FTC authority to seek an injunction in district court against any defendant that is “about to violate” one or more of those laws. For the past three decades, courts have adopted a permissive judicial interpretation of that language, authorizing injunctions against defendants when the allegedly impending violations were only “likely to recur” based on past misconduct. This …

Output Effect Of Private Antitrust Enforcement, Sinchit Lai

Fordham Journal of Corporate & Financial Law

A growing body of literature evaluates the impact of antitrust laws on economic growth. Most of these empirical studies identify a positive impact; however, the existing literature only studies the effect of the existence of antitrust laws, but not their enforcement. To fill this gap in the literature, this Article uses private antitrust case filing numbers to examine the growth effect. Employing U.S. data and, after addressing endogeneity, using a two-stage least squares (2SLS) regression analysis, I identify a negative and robust association between private enforcement and output on a national level in the short run over the period from …

Less Restrictive Alternatives And The Ancillary Restraints Doctrine, Thomas B. Nachbar

Seattle University Law Review

In Ohio v. American Express, both the majority and dissent introduced into Supreme Court antitrust jurisprudence a new test for evaluating restraints under the rule of reason: a less restrictive alternatives test. Occasionally appearing in circuit court cases, less restrictive alternatives tests have not been part of Supreme Court’s approach to the rule of reason, which generally evaluates restraints of trade by balancing their anticompetitive and procompetitive effects.

American Express was the first Supreme Court case to mention a less restrictive alternatives test, potentially representing a major shift in antitrust law, but it was not the last. In 2021’s …

Addressing Big Tech’S Market Power: A Comparative Institutional Approach, Thomas A. Lambert

SMU Law Review

This Article provides a comparative institutional analysis of the three leading approaches to addressing the market power of large digital platforms: (1) traditional antitrust law, the approach thus far taken in the United States; (2) ex ante conduct rules, the approach embraced by the European Union’s Digital Markets Act and several bills under consideration in the U.S. Congress; and (3) ongoing agency oversight, the approach embraced by the United Kingdom with its newly established “Digital Markets Unit.” After identifying the general advantages and disadvantages of each approach, the Article examines how they are likely to play out in the context …

The Crimes Of Digital Capitalism, Aitor Jiménez, J.C. Oleson

Mitchell Hamline Law Review

No abstract provided.