Pub Date : 2022-03-21DOI: 10.1177/0003603X221082733
N. Dunne
The United Kingdom, like many jurisdictions, is introducing more demanding ex ante regulation for the digital economy. Centered on the work of a Digital Markets Unit located within the existing copetition authority, the U.K. proposals are defined by an explicit commitment to “pro-competition” regulation. This article traces the evolution and emerging design of the forthcoming U.K. regime. It then explores the notion of pro-competition regulation in greater detail. While the concept increasingly transcends its domestic origins, this article argues that the balancing act between conventional competition law and traditional regulation that it reflects can be fully understood only when located within the distinctive circumstances of the wider U.K. regulatory landscape.
{"title":"Pro-competition Regulation in the Digital Economy: The United Kingdom’s Digital Markets Unit","authors":"N. Dunne","doi":"10.1177/0003603X221082733","DOIUrl":"https://doi.org/10.1177/0003603X221082733","url":null,"abstract":"The United Kingdom, like many jurisdictions, is introducing more demanding ex ante regulation for the digital economy. Centered on the work of a Digital Markets Unit located within the existing copetition authority, the U.K. proposals are defined by an explicit commitment to “pro-competition” regulation. This article traces the evolution and emerging design of the forthcoming U.K. regime. It then explores the notion of pro-competition regulation in greater detail. While the concept increasingly transcends its domestic origins, this article argues that the balancing act between conventional competition law and traditional regulation that it reflects can be fully understood only when located within the distinctive circumstances of the wider U.K. regulatory landscape.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"341 - 366"},"PeriodicalIF":0.0,"publicationDate":"2022-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43154852","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-21DOI: 10.1177/0003603X221082757
P. Bougette, Oliver Budzinski, F. Marty
Conceived as a theory of competitive harm, self-preferencing has been at the core of recent European landmark cases (e.g., Google Android, Google Shopping). In the context of EU competition law, beyond the anticompetitive leveraging effect, self-preferencing may lead to vertical and horizontal exclusionary abuses, encourage exploitation abuses, and generate economic dependence abuses. In this paper, we aim at characterizing the various forms of self-preferencing, investigating platforms’ capacity and incentives to do so through their dual role, by shedding light on the economic assessment of these practices in an effects-based approach. We analyze the different options for remedies in this context, by insisting on their necessity, adequacy, and proportionality.
{"title":"Self-Preferencing and Competitive Damages: A Focus on Exploitative Abuses","authors":"P. Bougette, Oliver Budzinski, F. Marty","doi":"10.1177/0003603X221082757","DOIUrl":"https://doi.org/10.1177/0003603X221082757","url":null,"abstract":"Conceived as a theory of competitive harm, self-preferencing has been at the core of recent European landmark cases (e.g., Google Android, Google Shopping). In the context of EU competition law, beyond the anticompetitive leveraging effect, self-preferencing may lead to vertical and horizontal exclusionary abuses, encourage exploitation abuses, and generate economic dependence abuses. In this paper, we aim at characterizing the various forms of self-preferencing, investigating platforms’ capacity and incentives to do so through their dual role, by shedding light on the economic assessment of these practices in an effects-based approach. We analyze the different options for remedies in this context, by insisting on their necessity, adequacy, and proportionality.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"190 - 207"},"PeriodicalIF":0.0,"publicationDate":"2022-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43417711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-01DOI: 10.1177/0003603X211067709
L. White
The U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) monopolization cases against Google and Facebook, respectively, represent the most important federal nonmerger antitrust initiatives since (at least) the 1990s. As in any monopolization case, market delineation will be a central feature of both cases—as it was in the du Pont Cellophane case of sixty-five years ago. Without a delineated market, how can one determine whether a company has engaged in monopolization? Unfortunately, there is currently no accepted market delineation paradigm that can help the courts address this issue for monopolization cases. And this void generally cannot be filled by the market delineation paradigm that is embedded in the DOJ-FTC “Horizontal Merger Guidelines”: although this paradigm has had almost forty years of usage and is now well established and well accepted for merger analysis, this paradigm generally has no applicability for market delineation in monopolization cases. This article expands on this argument and shows the potential difficulties that are likely to arise in this area of market delineation and the consequent problems for both cases. This article also points the way toward a paradigm that offers a sensible approach to dealing with these difficulties.
{"title":"The Dead Hand of Cellophane and the Federal Google and Facebook Antitrust Cases: Market Delineation Will Be Crucial","authors":"L. White","doi":"10.1177/0003603X211067709","DOIUrl":"https://doi.org/10.1177/0003603X211067709","url":null,"abstract":"The U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) monopolization cases against Google and Facebook, respectively, represent the most important federal nonmerger antitrust initiatives since (at least) the 1990s. As in any monopolization case, market delineation will be a central feature of both cases—as it was in the du Pont Cellophane case of sixty-five years ago. Without a delineated market, how can one determine whether a company has engaged in monopolization? Unfortunately, there is currently no accepted market delineation paradigm that can help the courts address this issue for monopolization cases. And this void generally cannot be filled by the market delineation paradigm that is embedded in the DOJ-FTC “Horizontal Merger Guidelines”: although this paradigm has had almost forty years of usage and is now well established and well accepted for merger analysis, this paradigm generally has no applicability for market delineation in monopolization cases. This article expands on this argument and shows the potential difficulties that are likely to arise in this area of market delineation and the consequent problems for both cases. This article also points the way toward a paradigm that offers a sensible approach to dealing with these difficulties.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"113 - 129"},"PeriodicalIF":0.0,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45302175","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-04DOI: 10.1177/0003603X211067122
Daniel Lumer
In the last several years, policymakers have increasingly pursued legislative reforms that would expand antitrust enforcement while advocating more generally for the break-up of tech companies with leading digital platforms. At least a half-dozen antitrust reforms were introduced in Congress in 2021, while federal enforcers in the Department of Justice and Federal Trade Commission have taken an aggressive approach to enforcement under the Biden administration. These recent events have invited an assessment of the scope and limitations of divestiture, as policymakers and regulators consider the remedy’s viability under existing and prospective federal antitrust laws. To that end, this paper aims to provide a comprehensive account of the development of the doctrinal principles and application of divestiture, beginning with its origins as an equitable remedy and subsequent developments in response to legislative reforms. The paper then discusses divestiture’s primary use in the current regulatory landscape to redress violations under § 7 of the Clayton Act, followed by an examination of its historically limited application as a remedy to unilateral conduct. In its final substantive section, the paper then assesses the ongoing debate as to divestiture’s applicability to acquisitions of nascent competitors. Finally, the conclusion provides a summary of divestiture’s doctrinal principles and application, and the implications for how divestiture may be applied in the future.
{"title":"Divestiture: Doctrinal Development and Modern Application","authors":"Daniel Lumer","doi":"10.1177/0003603X211067122","DOIUrl":"https://doi.org/10.1177/0003603X211067122","url":null,"abstract":"In the last several years, policymakers have increasingly pursued legislative reforms that would expand antitrust enforcement while advocating more generally for the break-up of tech companies with leading digital platforms. At least a half-dozen antitrust reforms were introduced in Congress in 2021, while federal enforcers in the Department of Justice and Federal Trade Commission have taken an aggressive approach to enforcement under the Biden administration. These recent events have invited an assessment of the scope and limitations of divestiture, as policymakers and regulators consider the remedy’s viability under existing and prospective federal antitrust laws. To that end, this paper aims to provide a comprehensive account of the development of the doctrinal principles and application of divestiture, beginning with its origins as an equitable remedy and subsequent developments in response to legislative reforms. The paper then discusses divestiture’s primary use in the current regulatory landscape to redress violations under § 7 of the Clayton Act, followed by an examination of its historically limited application as a remedy to unilateral conduct. In its final substantive section, the paper then assesses the ongoing debate as to divestiture’s applicability to acquisitions of nascent competitors. Finally, the conclusion provides a summary of divestiture’s doctrinal principles and application, and the implications for how divestiture may be applied in the future.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"146 - 181"},"PeriodicalIF":0.0,"publicationDate":"2022-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47579888","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-01DOI: 10.1177/0003603X211070122
H. First
In this Essay, which serves as a Foreword to the Antitrust Bulletin Symposium issue on the Google and Facebook cases, I argue that the Internet is now in the process of disrupting antitrust, as it has disrupted so many other areas of business and political life. This should not be surprising. The basic architecture of the Internet—decentralization and content agnosticism—enabled disruption; disruption is a “feature not a bug.” There is no reason to think that this disruption is now over and good reason to recognize its effect on antitrust. The Essay thus sketches out some of the ways in which the “Internet of Change” is now disrupting antitrust, including basic legal concepts (“markets” “monopoly”), economic models (reduced output is not the problem), and theories of harm. The Essay then provides short descriptions of the articles in the Symposium and concludes that although the Internet of Change has increased our impatience, we may have no choice but to await the slow and uncertain progress of the current litigation.
{"title":"The Internet of Change: Foreword to the Symposium on the Google and Facebook Cases","authors":"H. First","doi":"10.1177/0003603X211070122","DOIUrl":"https://doi.org/10.1177/0003603X211070122","url":null,"abstract":"In this Essay, which serves as a Foreword to the Antitrust Bulletin Symposium issue on the Google and Facebook cases, I argue that the Internet is now in the process of disrupting antitrust, as it has disrupted so many other areas of business and political life. This should not be surprising. The basic architecture of the Internet—decentralization and content agnosticism—enabled disruption; disruption is a “feature not a bug.” There is no reason to think that this disruption is now over and good reason to recognize its effect on antitrust. The Essay thus sketches out some of the ways in which the “Internet of Change” is now disrupting antitrust, including basic legal concepts (“markets” “monopoly”), economic models (reduced output is not the problem), and theories of harm. The Essay then provides short descriptions of the articles in the Symposium and concludes that although the Internet of Change has increased our impatience, we may have no choice but to await the slow and uncertain progress of the current litigation.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"3 - 11"},"PeriodicalIF":0.0,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44764249","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-01DOI: 10.1177/0003603X211067115
W. Comanor, Donald I. Baker
Although the Consumer Welfare doctrine has served as an important feature of antitrust liability since the 1980s, the Department of Justice (DOJ) and Federal Trade Commission (FTC) have downplayed this factor in their respective Google and amended Facebook complaints. Each complaint makes a general reference to this issue, but with few detailed factual allegations. A complicating factor is that the defendants have gained dominant market positions by providing valuable digital services at little or no direct charge to consumers. In this paper, we emphasize that the services offered by the two platforms embody quality as well as price dimensions, both of which can affect consumers positively. Indeed, quality product dimensions may become even more important to consumers in a zero price environment. We construct a simple economic model using privacy as a significant quality attribute through which these issues can be explored, and then draw some appropriate policy conclusions.
{"title":"The Issue of Consumer Welfare in the Government Complaints against Google & Facebook","authors":"W. Comanor, Donald I. Baker","doi":"10.1177/0003603X211067115","DOIUrl":"https://doi.org/10.1177/0003603X211067115","url":null,"abstract":"Although the Consumer Welfare doctrine has served as an important feature of antitrust liability since the 1980s, the Department of Justice (DOJ) and Federal Trade Commission (FTC) have downplayed this factor in their respective Google and amended Facebook complaints. Each complaint makes a general reference to this issue, but with few detailed factual allegations. A complicating factor is that the defendants have gained dominant market positions by providing valuable digital services at little or no direct charge to consumers. In this paper, we emphasize that the services offered by the two platforms embody quality as well as price dimensions, both of which can affect consumers positively. Indeed, quality product dimensions may become even more important to consumers in a zero price environment. We construct a simple economic model using privacy as a significant quality attribute through which these issues can be explored, and then draw some appropriate policy conclusions.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"12 - 22"},"PeriodicalIF":0.0,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43968942","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-26DOI: 10.1177/0003603X211067829
G. Lozada
Some economists argue antitrust policy should be based on empirical methods used by the Industrial Organization subdiscipline of economics, but those methods contain assumptions that noneconomists should recognize. Those assumptions underlie econometric “identification,” and underlie treating aggregate demand as if it were generated by a representative consumer (Muellbauer’s “generalized linear” preferences). We explain aggregation bias in Almost Ideal Demand System models, then show that data limitations make it even harder to justify economists’ restricting aggregate demands as one would the demand of one individual. Such problems notwithstanding, the main problem with antitrust econometrics may be that there is not enough of it. Whether firms maximize profit is understudied empirically; many may maximize return on assets instead, leading to firms with assets and employees below their profit-maximizing level. There is insufficient empirical study of this and many other topics of concern to New Brandeisians.
{"title":"A Critique of Antitrust Econometrics: Aggregation, the Representative Consumer, and the Broader Concerns of the New Brandeis School","authors":"G. Lozada","doi":"10.1177/0003603X211067829","DOIUrl":"https://doi.org/10.1177/0003603X211067829","url":null,"abstract":"Some economists argue antitrust policy should be based on empirical methods used by the Industrial Organization subdiscipline of economics, but those methods contain assumptions that noneconomists should recognize. Those assumptions underlie econometric “identification,” and underlie treating aggregate demand as if it were generated by a representative consumer (Muellbauer’s “generalized linear” preferences). We explain aggregation bias in Almost Ideal Demand System models, then show that data limitations make it even harder to justify economists’ restricting aggregate demands as one would the demand of one individual. Such problems notwithstanding, the main problem with antitrust econometrics may be that there is not enough of it. Whether firms maximize profit is understudied empirically; many may maximize return on assets instead, leading to firms with assets and employees below their profit-maximizing level. There is insufficient empirical study of this and many other topics of concern to New Brandeisians.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"69 - 99"},"PeriodicalIF":0.0,"publicationDate":"2022-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42506743","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-26DOI: 10.1177/0003603X211066984
Marshall I. Steinbaum
In June 2021, a federal judge dismissed the Federal Trade Commission’s first monopolization complaint against Facebook on the grounds that it did not plead sufficient facts to establish that Facebook possesses monopoly power in online social networking. The ruling highlights two contentious aspects of antitrust jurisprudence: the legal necessity of establishing a defendant’s monopoly power as part of Sherman Act liability for unilateral conduct, and of establishing market power as part of liability for some forms of multi-lateral conduct, as well as the few mechanisms available to plaintiffs in both public and private enforcement to accomplish that, especially following Ohio v. American Express. This article makes two related claims: that direct evidence of market power is plentiful and should be understood as such by courts, and that exactly the direct evidence of market power that courts should consider also establishes that relevant markets on each side of tech platforms are small when properly defined, whatever defendants may say.
{"title":"Establishing Market and Monopoly Power in Tech Platform Antitrust Cases","authors":"Marshall I. Steinbaum","doi":"10.1177/0003603X211066984","DOIUrl":"https://doi.org/10.1177/0003603X211066984","url":null,"abstract":"In June 2021, a federal judge dismissed the Federal Trade Commission’s first monopolization complaint against Facebook on the grounds that it did not plead sufficient facts to establish that Facebook possesses monopoly power in online social networking. The ruling highlights two contentious aspects of antitrust jurisprudence: the legal necessity of establishing a defendant’s monopoly power as part of Sherman Act liability for unilateral conduct, and of establishing market power as part of liability for some forms of multi-lateral conduct, as well as the few mechanisms available to plaintiffs in both public and private enforcement to accomplish that, especially following Ohio v. American Express. This article makes two related claims: that direct evidence of market power is plentiful and should be understood as such by courts, and that exactly the direct evidence of market power that courts should consider also establishes that relevant markets on each side of tech platforms are small when properly defined, whatever defendants may say.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"130 - 145"},"PeriodicalIF":0.0,"publicationDate":"2022-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49088265","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-19DOI: 10.1177/0003603X211066978
G. Monti
This paper offers a comparative account of how the European Union and the United States surveil dominant internet players in light of recent enforcement efforts by U.S. antitrust agencies and ongoing discussions about regulating digital giants in both jurisdictions. After setting out themes for comparative analysis, the paper turns to the two actions initiated in the United States against Google: the one filed by the Department of Justice (DOJ) is similar in focus to the European Commission’s Android decision and the one led by the State of Texas focuses on advertising markets in a manner similar to the European Commission’s AdSense decision. We observe that while there are similar intuitions about anticompetitive conduct in the manner both jurisdictions address the issues, the framing of the competition problem by the U.S. agencies is more sophisticated in relation to the understanding of the markets, the theories of harm, and the design of forward-looking remedies. The paper then compares the Commission’s proposal for a Digital Markets Act with several Bills proposing platform regulation presently discussed in the United States, examining what the two systems have in common, what they may learn from each other, and what regulatory gaps remain.
{"title":"Taming Digital Monopolies: A Comparative Account of the Evolution of Antitrust and Regulation in the European Union and the United States","authors":"G. Monti","doi":"10.1177/0003603X211066978","DOIUrl":"https://doi.org/10.1177/0003603X211066978","url":null,"abstract":"This paper offers a comparative account of how the European Union and the United States surveil dominant internet players in light of recent enforcement efforts by U.S. antitrust agencies and ongoing discussions about regulating digital giants in both jurisdictions. After setting out themes for comparative analysis, the paper turns to the two actions initiated in the United States against Google: the one filed by the Department of Justice (DOJ) is similar in focus to the European Commission’s Android decision and the one led by the State of Texas focuses on advertising markets in a manner similar to the European Commission’s AdSense decision. We observe that while there are similar intuitions about anticompetitive conduct in the manner both jurisdictions address the issues, the framing of the competition problem by the U.S. agencies is more sophisticated in relation to the understanding of the markets, the theories of harm, and the design of forward-looking remedies. The paper then compares the Commission’s proposal for a Digital Markets Act with several Bills proposing platform regulation presently discussed in the United States, examining what the two systems have in common, what they may learn from each other, and what regulatory gaps remain.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"40 - 68"},"PeriodicalIF":0.0,"publicationDate":"2022-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49288080","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-19DOI: 10.1177/0003603X211066983
Marc Jarsulic
Facebook and Alphabet operate free internet services that are widely used. They provide these services for free because users are online ad targets. Together Facebook and Alphabet have a large share of the market for online advertising in the U.S. Their dominance delivers monopolistic returns, reflected in the persistently high valuations financial markets place on each company. Online ad sales depend on the ability of these platforms to individually target ads and messages to huge numbers of people. Targeting is made possible by surveillance which is large in scale, scope, and effectiveness. User engagement, which helps determine target numbers, is stimulated and directed by “recommendation” algorithms on Facebook and Alphabet’s YouTube platform. These algorithms can affect what users read and view, and can influence their attitudes, emotions, and behavior. While surveillance has negative effects on user privacy, and algorithms have had powerful effects on user attitudes and behavior, platform users have limited knowledge about how these practices operate or their impacts. These information asymmetries between platforms and users have important competitive effects. They divert users from competing platforms that do not engage in these business practices, and inhibit entry and the innovation it would stimulate, thereby helping sustain the monopoly power of dominant incumbents. Section 5 of the Federal Trade Commission Act, which prohibits “unfair methods of competition” and includes rulemaking authority, may be the most effective way to address anticompetitive practices that are technically complex, can evolve rapidly, and are difficult for industry outsiders to observe.
{"title":"Addressing the Competitive Harms of Opaque Online Surveillance and Recommendation Algorithms","authors":"Marc Jarsulic","doi":"10.1177/0003603X211066983","DOIUrl":"https://doi.org/10.1177/0003603X211066983","url":null,"abstract":"Facebook and Alphabet operate free internet services that are widely used. They provide these services for free because users are online ad targets. Together Facebook and Alphabet have a large share of the market for online advertising in the U.S. Their dominance delivers monopolistic returns, reflected in the persistently high valuations financial markets place on each company. Online ad sales depend on the ability of these platforms to individually target ads and messages to huge numbers of people. Targeting is made possible by surveillance which is large in scale, scope, and effectiveness. User engagement, which helps determine target numbers, is stimulated and directed by “recommendation” algorithms on Facebook and Alphabet’s YouTube platform. These algorithms can affect what users read and view, and can influence their attitudes, emotions, and behavior. While surveillance has negative effects on user privacy, and algorithms have had powerful effects on user attitudes and behavior, platform users have limited knowledge about how these practices operate or their impacts. These information asymmetries between platforms and users have important competitive effects. They divert users from competing platforms that do not engage in these business practices, and inhibit entry and the innovation it would stimulate, thereby helping sustain the monopoly power of dominant incumbents. Section 5 of the Federal Trade Commission Act, which prohibits “unfair methods of competition” and includes rulemaking authority, may be the most effective way to address anticompetitive practices that are technically complex, can evolve rapidly, and are difficult for industry outsiders to observe.","PeriodicalId":36832,"journal":{"name":"Antitrust Bulletin","volume":"67 1","pages":"100 - 112"},"PeriodicalIF":0.0,"publicationDate":"2022-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42701568","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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