Antitrust Doctrine Research Articles

What Is an Antitrust Problem, Anyway? Toward Antitrust Unlimited

What is it we talk about when we talk about antitrust? Frequently, a call for antitrust action at the frontier of the field is met by the response that the issue in question is “not an antitrust problem.” Things we were told pre-2020 were not “antitrust problems,” it ran the gamut from “patent holdup” and forcing a buyer to take an unwanted product to fake news and privacy breaches. Surprisingly, however, “antitrust problem” is not a well-defined term. As this has been pointed out, U.S. antitrust law as it exists today does not punish all ends that injure consumer welfare—for example, it is explicitly legal to possess a monopoly, and to use it to restrict output and charge monopoly prices. Nor does antitrust punish all means that injure consumer welfare—fraud and deception can injure consumer welfare, but without more they are not actionable under the antitrust laws. Post-2020, we find ourselves in an era in which policymakers are asking, not without some pushback, whether economic inequality, racial disparities, and decades of falling or stagnant wages can and should be addressed as problems by antitrust law. To define “antitrust problem,” we must consider what antitrust is ultimately supposed to protect: the benefits for Americans of a national economic system based on market competition. Displacing such a system, and thereby depriving consumers of the benefits of such a system, is at the heart of what antitrust was designed to accomplish—even if contemporary antitrust doctrine paints in much narrower brushstrokes.

The Flawed Analysis Underlying Calls for Antitrust Reform: An Assessment of Lina Khan’s Amazon’s Antitrust Paradox

In her law journal article Amazon’s Antitrust Paradox, Lina Khan argued, using Amazon as an example, that current antitrust doctrine cannot identify certain types of anticompetitive conduct in platform and data-driven markets and, consequently, reforming antitrust is necessary to correct these deficiencies. Khan’s analysis of Amazon’s conduct and the conclusions she drew from it are flawed because she ignored or misapplied the economics of two-sided markets, mischaracterized competitive conditions, and did not consider the pro-competitive effects of Amazon’s conduct. In this article, we review the economics of two-sided markets and then assess Khan’s analysis of alleged predation in e-books and in the online sale of diapers, as well as alleged anticompetitive implications of Amazon’s vertical integration into logistics and its use of data. A careful assessment of Amazon’s conduct does not support Khan’s conclusion that antitrust reform is necessary because she has not demonstrated that Amazon’s conduct is anticompetitive.

Defining Relevant Markets in the Digital Era: Lessons from Merger Control in Brazil, Chile and Mexico

Abstract Relevant market definition methodology has been a thorny issue over the years for antitrust doctrine and practice. This is especially true when it comes to digital markets, in which prices may not be a significant variable for defining relevant markets. Traditional or static views of competition may result in improper market definitions, which might result in the clearance of mergers in digital markets because antitrust authorities define market shares according to traditional methods of measurement. However, this seems like a chicken-and-egg problem, because it is only by appropriately defining relevant markets that it is possible to establish if market shares are high or low. This article discusses practical implications for antitrust enforcement derived from the relevant market definitions adopted in high-profile digital market mergers in Brazil, Chile and Mexico. Many of these cases have elements of conglomerate or vertical integration that go beyond traditional demand substitution measurement and test the authorities’ ability to foresee future competitive scenarios in which digital competition and brick-and-mortar competition have become increasingly complementary. These cases also show an increasingly large role of data concentration as a driver in the attractiveness of the acquisitions.

Implications of the Digital Economy on Merger Control in Pakistan and China: Policy Implications for Pakistan

The rise of the digital economy has challenged the foundation of competition law frameworks the world over. Today, the antitrust doctrine finds itself confronting a new economy; an econo-my wherein data acts as a currency, markets are without prices, market collisions are based on algorithms, and the market is ‘infinite’. Several jurisdictions such as Germany, Austria, and China have developed new regulations or amended existing legislations to confront the chal-lenges presented by the digital economy. A dearth of theoretical and empirical literature has evaluated whether digital markets are so fundamentally different as to require a different set of rules. Of specific interest to this paper is whether current competition rules are sufficient to deal with mergers and acquisitions (M&As) in digital markets. This paper assesses M&A regulations in China and Pakistan in light of the new digital economy. Expert interviews were conducted using semi-structured interviews to investigate the comparisons between Pakistan’s and China’s merger control regimes. The findings indicate that China’s merger control regulations are better adopted for the digital economy than Pakistani’s. It also sets out the policy implications for competition policy makers in Pakistan.

Antitrust Exemptions and Immunities in the Digital Economy

Exemptions and immunities limit the reach of the antitrust laws. If the courts and agencies implement exemptions and immunities too expansively, anticompetitive conduct will elude enforcement and thereby injure consumers. The dynamic nature of the digital economy amplifies these concerns. Policymakers, courts, and regulators must diligently assess the ever-changing digital landscape and tailor antitrust doctrine accordingly.

Antitrust and Competition Issues

This Chapter offers a broad overview of the impact of U.S. antitrust laws on IP licensing and transactions. A basic understanding of antitrust law is critical to the analysis of IP licensing arrangements, whether concerning patents, copyrights or trademarks. This chapter offers a summary of the antitrust doctrines that arise frequently in IP and technology-focused transactions — price fixing and market allocation, resale price maintenance, tying, monopolization, refusals to deal, standard setting and pay-for-delay settlements, with coverage of the major cases and enforcement agency guidance. Antitrust issues also play a role in the analysis of joint ventures, which are discussed in Chapter 26, and IP pools, which are discussed in Chapter 27 (a preview of this topic is presented in Part E below).

A Preface to Post-Chicago Antitrust

Three broad eras have characterized antitrust interpretation in the United States: a classical era around the end of the 19th Century, a structural era around the middle of the 20th Century, and a Chicago school perspective characterizing the last quarter of the 20th Century. This essay examines that history, asks why antitrust doctrine changes over time, and suggests some doctrinal possibilities for a new, post-Chicago era of antitrust interpretation that may be emerging.

Antitrust in the Consumer Platform Economy: How Apple Has Abused its Mobile Platform Dominance

Consumer tech platforms such as Apple, Amazon, Google, and Facebook form indispensable parts of the modern economy. While their growing dominance increasingly threatens competition and consumer welfare, the outdated thinking behind current American antitrust law impedes enforcement against their abuse of power. The story of how Apple, which controls a critical gateway to the digital economy, has leveraged its dominance over the smartphone platform market to harm competition and deter the rise of future platforms provides salutary lessons and calls for special antitrust scrutiny for powerful tech platforms. This Note analyzes Apple’s violations of American antitrust law to inform ongoing litigation and investigations. It traces how Apple has abused its control of the App Store and the smartphone platform market through illegal tying and monopolistic refusal to deal, both hitherto under-studied issues. In forcing a supra-competitive 30% tax on third-party apps, blocking competitors, and favoring its own apps over rivals’, Apple’s anti-competitive practices have not only raised smartphone app prices and stunted innovation, but have also prolonged and expanded its monopoly by deterring future platforms from emerging. Using a Less Restrictive Alternative approach, the Note shows claimed benefits of Apple’s conduct are either pre-textual or unnecessarily restrictive. This Note also updates antitrust law by examining how the consumer platform economy has upended assumptions underlying traditional antitrust doctrines. Building on modern economics literature, it finds consumers and small businesses’ resource limitations, ecosystem lock-ins, and multi-layered networks create extraordinary information and switching costs, which give tech platforms immense power that their market share numbers belie. They also give platforms strong incentives to leverage their monopoly power outward, causing irreversible harm. These findings challenge traditional antitrust assumptions about rationality, market efficiency, and lack of entry barriers, which give an overly charitable view of dominant firms, and call for a rethinking of the current regime. The Note closes by proposing changes to current antitrust doctrines and enforcement. It is high time that courts reconsidered their hostility to monopoly leveraging and refusal to deal claims. Adjusting class action threshold to account for the diverse impacts of platform abuse of dominance will be critical to ensure private enforcement viability. Federal antitrust enforcement agencies will also need to step up with their resource and incentive advantages to aggressively push for evidence-finding, expanding antitrust doctrines, and helping small players where private plaintiffs fall short.

Respectful Consideration, but Not Deference: Chinese Sovereign Amici in the US Supreme Court Vitamin C Judgment

In the first lawsuit in the U.S. history, the Vitamin C witnesses the Chinese government’s intervention to take a position as amicus curiae. • It is also for the first time, the U.S. Supreme Court has articulated a “respectful consideration” test that lower courts should use in the application of Federal Rule of Civil Procedure (FRCP) 44.1 while dealing with foreign sovereign’s interpretation of their own law. • The implications of the Supreme Court’s decision reach well beyond the confines of antitrust doctrine. In an era of increasing globalisation, the case sets the ground rules for a broad range of cross-border disputes.

Correcting Common Misperceptions About the State of Antitrust Law and Enforcement in Digital Markets

Allegations of the insufficiency of the modern antitrust regime regularly take as given that there is something wrong with antitrust doctrine or its enforcement, and cast about for policy “corrections.” The common flaw with all of these arguments, however, is that they are not grounded in robust empirical or theoretical support. Rather, they are little more than hunches that something must be wrong, conscripted to serve a presumptively interventionist agenda. Because they are merely hypotheses about things that could go wrong, they do not determine — and rarely even ask — if heightened antitrust scrutiny and increased antitrust enforcement are actually called for in the first place. Of course, it is possible that there are harms being missed and for which enforcers should be better equipped. Advocates of reform have yet to adequately explain much of what we need to know to make such a determination, however, and even more so to craft the right approach to it if we did. Laws should be formulated on more than an intuition that surely, somewhere, there must be anticompetitive conduct. Antitrust law should be refined on the basis of an empirical demonstration of harms, as well as a careful weighing of those harms against the losses to social welfare that would arise if procompetitive conduct were deterred alongside anticompetitive. Contrary to the conventional wisdom, enforcers are hardly asleep at the switch and courts are hardly blindly deferential to conduct undertaken by large firms in the digital economy. It is impossible to infer from the general “state of the world,” or from perceived “wrong” judicial decisions, that the current antitrust regime has failed. In particular, several common misperceptions seem to be fueling the current drive for new and invigorated antitrust laws. These misperceptions are that: We can infer that antitrust enforcement is lax by looking at the number of cases enforcers bring; Concentration is rising across the economy, and, as a result of this trend, competition is declining; Digital markets must be uncompetitive because of the size of many large digital platforms; Vertical integration by dominant digital platforms is presumptively harmful; Digital platforms anticompetitively self-preference to the detriment of competition and consumers; Dominant tech platforms engage in so-called “killer acquisitions” to stave off potential competitors before they grow too large; and Access to user data confers a competitive advantage on incumbents and creates an important barrier to entry. I address these misconceptions in turn.

Error Costs in Digital Markets

Legal decision-making and enforcement under uncertainty are always difficult and always potentially costly. The risk of error is always present given the limits of knowledge, but it is magnified by the precedential nature of judicial decisions: an erroneous outcome affects not only the parties to a particular case, but also all subsequent economic actors operating in “the shadow of the law.” The inherent uncertainty in judicial decision-making is further exacerbated in the antitrust context where liability turns on the difficult-to-discern economic effects of challenged conduct. And this difficulty is still further magnified when antitrust decisions are made in innovative, fast-moving, poorly-understood, or novel market settings—attributes that aptly describe today’s digital economy. Rational decision-makers will undertake enforcement and adjudication decisions with an eye toward maximizing social welfare (or, at the very least, ensuring that nominal benefits outweigh costs). But “[i]n many contexts, we simply do not know what the consequences of our choices will be. Smart people can make guesses based on the best science, data, and models, but they cannot eliminate the uncertainty.” Because uncertainty is pervasive, we have developed certain heuristics to help mitigate both the direct and indirect costs of decision-making under uncertainty, in order to increase the likelihood of reaching enforcement and judicial decisions that are on net beneficial for society. One of these is the error-cost framework. In simple terms, the objective of the error-cost framework is to ensure that regulatory rules, enforcement decisions, and judicial outcomes minimize the expected cost of (1) erroneous condemnation and deterrence of beneficial conduct (“false positives,” or “Type I errors”); (2) erroneous allowance and under-deterrence of harmful conduct (“false negatives,” or “Type II errors”); and (3) the costs of administering the system (including the cost of making and enforcing rules and judicial decisions, the costs of obtaining and evaluating information and evidence relevant to decision-making, and the costs of compliance). In the antitrust context, a further premise of the error-cost approach is commonly (although not uncontroversially) identified: the assumption that, all else equal, Type I errors are relatively more costly than Type II errors. “Mistaken inferences and the resulting false condemnations ‘are especially costly, because they chill the very conduct the antitrust laws are designed to protect.’” Thus the error-cost approach in antitrust typically takes on a more normative objective: a heightened concern with avoiding the over-deterrence of procompetitive activity through the erroneous condemnation of beneficial conduct in precedent-setting judicial decisions. Various aspects of antitrust doctrine—ranging from antitrust pleading standards to the market definition exercise to the assignment of evidentiary burdens—have evolved in significant part to constrain the discretion of judges (and thus to limit the incentives of antitrust enforcers) to condemn uncertain, unfamiliar, or nonstandard conduct, lest “uncertain” be erroneously identified as “anticompetitive.” The concern with avoiding Type I errors is even more significant in the enforcement of antitrust in the digital economy because the “twin problems of likelihood and costs of erroneous antitrust enforcement are magnified in the face of innovation.” Because erroneous interventions against innovation and the business models used to deploy it threaten to deter subsequent innovation and the deployment of innovation in novel settings, both the likelihood and social cost of false positives are increased in digital and other innovative markets. Thus the avoidance of error costs in these markets also raises the related question of the proper implementation of dynamic analysis in antitrust.

Challenges to the Conventional Wisdom About Mergers and Consumer Welfare in a Converging Internet Marketplace

This paper identifies substantial flaws in how U.S. government agencies and courts assess the impact of proposed mergers by firms using broadband networks to reach consumers. Based on current market definitions, consumer impact assessments and economic doctrine, antitrust enforcement agencies may fail to identify the risk of harm to consumers and competition, a so-called false negative. In recent years, the Department of Justice, Federal Communications Commission and Federal Trade Commission, individually and collectively, have assessed the competitive consequences of numerous multi-billion dollar acquisitions and have conditionally approved almost all of them. These agencies appear predisposed to favor deals that involve vertical integration between market segments, based on assumptions that short term consumer welfare gains exceed any potential competitive harms. The paper concludes that reviewing government agencies appear too willing to extend current assumptions about how “bricks and mortar” markets work to transactions occurring via broadband networks. By “fighting the last war,” these agencies fail to identify new risks to consumer welfare, particularly by ventures operating in multiple markets that do not readily fit into the conventional assessment of mutually exclusive vertical and horizontal “food chains.” In a broadband ecosystem where both technologies and markets converge, ventures can appear to offer consumers an incredible value proposition. Like economists’ determination that there is no such thing as a free lunch, a better calibrated, multi-dimensional analysis would identify significant offsetting harms to “free” Internet services like that offered by Facebook and Google. The paper concludes that recent and future acquisitions of broadband ventures have a much greater likelihood of generating legitimate concerns about competitive and consumer harms, particularly as markets become ever more concentrated, often dominated by a single firm. The paper does not recommend a repudiation of Chicago School antitrust doctrine, but recommends that reviewing agencies and courts calibrate empirical measures of prospective costs and benefits to consumers from a proposed merger by identifying short term and longer-term impacts on core and adjacent markets.

Algorithms and Conscious Parallelism: Why Current Antitrust Doctrine is Prepared for the Twenty-First Century Challenges Posed by Dynamic Pricing

Algorithms and Conscious Parallelism: Why Current Antitrust Doctrine is Prepared for the Twenty-First Century Challenges Posed by Dynamic Pricing

Section 2 Mangled: FTC v Qualcomm on the Duty to Deal, Price Squeezes, and Exclusive Dealing

Abstract Judge Koh handed down a sweeping opinion in May 2019 condemning as antitrust violations many of Qualcomm’s licensing practices related to its patented chips and standard-essential technology used in mobile devices. The district court opinion significantly expands the scope of liability for refusals to deal and for non-predatory pricing, further eroding the longstanding symmetrical approach to antitrust enforcement regardless of the kind of property involved. We find three glaring errors in the district court opinion. First, the court expands the exception to the general rule permitting refusals to deal, as laid out in Aspen Skiing, well beyond the outer boundary of Section 2 by inappropriately inferring a prior course of dealing and erroneously finding a willingness to sacrifice profits. Secondly, the district court accepted a price squeeze theory—characterized by the FTC as a ‘tax’ on OEMs transacting with Qualcomm’s rivals—directly contrary to the Supreme Court’s holding in linkLine. Thirdly, the court erroneously concluded that Qualcomm’s exclusive dealing arrangements with Apple violate the Sherman Act, despite a glaring failure by the FTC to prove substantial foreclosure, contrary to modern antitrust precedent and economic theory. The district court’s inappropriate extension of antitrust liability in three separate areas of well-settled antitrust doctrine is remarkable and threatens to upend important precedent that has successfully guided business conduct for many years. Further, the remedy transforms the role of antitrust courts from adjudicators to central planners, a role for which the Trinko Court expressly stated they are ill suited. The decision invites plaintiffs to use the Sherman Act to reach conduct that has been generally shielded from antitrust liability. That invitation is ill advised and should be rejected by the Ninth Circuit, and if necessary, the Supreme Court.

Section 2 Mangled: FTC v. Qualcomm on the Duty to Deal, Price Squeezes, and Exclusive Dealing

Judge Koh handed down a sweeping opinion in May 2019 condemning as antitrust violations many of Qualcomm’s business practices related to the royalty rates it charged to license its SEPs. The district court opinion significantly expands the scope of liability for refusals to deal and for non-predatory pricing behavior, further eroding the longstanding symmetrical approach to antitrust enforcement regardless of the kind of property involved. We find three glaring errors in the district court opinion. First, the court expands the exception to the general rule permitting refusals to deal, as laid out in Aspen Skiing, well beyond the outer boundary of Section 2 by applying it to contracts negotiated by Qualcomm over 20 years ago and by inferring the company was willing to sacrifice profits even in the face of evidence that the change in dealing was implemented to increase short-term profits. Second, the district court accepted a price squeeze theory—characterized by the FTC as a “tax” on OEMs transacting with Qualcomm’s rivals—directly contrary to the Supreme Court’s holding in linkLine. Third, the court erroneously concluded that Qualcomm’s exclusive dealing arrangements with Apple violate the Sherman Act, despite a glaring failure by the FTC to prove substantial foreclosure, contrary to modern antitrust precedent and economic theory, both of which make crystal clear that proof of substantial foreclosure is necessary to showing an anticompetitive effect from exclusive dealing. The district court’s inappropriate extension of antitrust liability in three separate areas of well-settled antitrust doctrine is remarkable and threatens to upend important precedent that has successfully guided business conduct for years. Further, the remedy—aside from putting the nation’s security at risk and potentially undermining U.S. leadership in 5G technology and standard-setting—transforms the role of antitrust courts from adjudicators to central planners, a role for which the Trinko Court expressly stated they are ill suited. The decision invites plaintiffs to use the Sherman Act to reach conduct that has been generally shielded from antitrust liability. That invitation is ill advised and should be rejected by the Ninth Circuit, and if necessary, the Supreme Court.

Strengthening Antitrust Enforcement Within the Consumer Welfare Rubric

There is a chasm among the many who agree that antitrust law is underenforced. Some see the “consumer welfare” standard, which underpins contemporary antitrust, as so flawed that it should be abandoned. While I share their concerns about the market power problem, particularly in the digital platform markets, I believe that a complete shift in paradigm is neither necessary to reinvigorate antitrust enforcement, nor wise. A common critique of consumer welfare is that it supposedly focuses exclusively on consumers and on short-term price effects, ignoring non-consumers and nonprice effects. Other more “populist” critiques fault the standard for not addressing the social and political harms of market power. With respect to the first set of perceived limitations, I disagree that the standard is so limited and argue that it is capable of a broader reach if used to its full scope. Records of antitrust enforcement and court decisions show that it can take into account the harmful effects, caused by disruptions to competition, on non-consumer purchasers and even on sellers (including workers, who are sellers of labor). I argue that it is capable of reaching even harmful effects on competitors, despite the mantra that antitrust protects competition, not competitors. While antitrust enforcement has fallen short, I argue that it is due, not to legal deficiencies in the consumer welfare standard, but to other factors, including the inability of antitrust enforcers to fully keep up with the new markets, the difficulty of applying nonprice metrics in analysis, burdensome evidentiary standards, and the Court’s restrictive interpretation of a few important relevant antitrust doctrines. Finding practical solutions to these problems, which I believe is possible, should strengthen antitrust enforcement within the consumer welfare rubric, and would be less disruptive than abandoning a paradigm that is conceptually sound if not always applied well. The key to addressing the competitive challenges in today’s digital markets is not to change the consumer welfare paradigm but to make intelligent changes within it. With respect to the charge that consumer welfare does not address a panoply of social and political ills associated with concentration and the digital platforms, I agree that is true. However, I argue that antitrust law cannot be burdened with performing tasks for which it was not designed, and that doing so risks unintended and undesirable consequences. The more effective approach to tackling the serious but non-competition related problems of political power, economic inequality, privacy intrusions, data security breaches, “fake news,” and so forth is to do so directly, using other existing or new laws designed specifically for those purposes.

Assessing Merger Impacts on Consumer Welfare in a Converging Internet Marketplace

This article identifies substantial flaws in how U.S. government agencies and courts assess merger proposals by ventures operating in the information, communications and entertainment (“ICE”) marketplace. Using current market definitions, consumer impact assessments and economic doctrine, antitrust enforcement agencies may fail to identify the risk of harm to consumers and competition, a so-called false negative. In recent years, the Department of Justice, Federal Communications Commission and Federal Trade Commission, individually and collectively, have assessed the competitive consequences of numerous multi-billion dollar acquisitions and have conditionally approved almost all of them. These agencies appear predisposed to favor deals that involve vertical integration up and down market segments, based on an assumption that short terms consumer welfare gains would exceed any potential competitive harms. The article concludes that reviewing government agencies appear to overemphasize past and current marketplace conditions rather than assess future impacts on consumers and competition. By “fighting the last war,” these agencies fail to identify new risks to consumer welfare, particularly by ventures operating in multiple markets that do not readily fit into the conventional assessment of mutually exclusive vertical and horizontal “food chains.” In an ecosystem where both technologies and markets converge, ventures can appear to offer consumers an incredible value proposition akin to a “free lunch.” A better calibrated, multi-dimensional analysis would identify significant offsetting harms. The article suggests that the narrow fixation on near term impact on consumers and the prices they pay insufficiently assesses the potential for harm, particularly for Internet-based ventures that require no cash payment for service. Government antitrust enforcement agencies compound mistakes in market impact assessment by ignoring how firms finance “free services” through often obscured collection, analysis and sale of consumer data. In light of increasing concentration in the ICE marketplace, through mergers and the impact of converging technologies, surviving ventures can adversely impact both core and now more closely integrated, adjacent markets. The article will examine how and why the FTC approved the acquisition of DoubleClick by Google in 2007, having concluded insignificant competitive harm will occur even as Google quickly grew to dominate nearly all sectors of the ICE advertising marketplace. The article also evaluates whether in conditionally approving Comcast’s acquisition of NBC/Universal the FCC failed to safeguard consumers. Additionally, the article considers whether AT&T, as anticipated by reviewing courts, flowed through to consumers any of the anticipated efficiency gains and cost savings generated by its acquisition of Time Warner. The article concludes that recent and future ICE acquisitions have a much greater likelihood of generating legitimate concerns about competitive and consumer harms, particularly as ICE market becomes ever more concentrated and often dominated by a single firm. The article does not recommend a repudiation of Chicago School antitrust doctrine, but recommends that reviewing agencies and courts calibrate empirical measures of prospective costs and benefits of a proposed merger by identifying short term and longer-term impacts on core and adjacent markets.

Platforms, Entry, and Innovation

There is vigorous debate over the ability of the current antitrust enforcement regime in the United States to protect against potential reductions in competition caused by large technology companies. Some commentators have argued that current antitrust rules and processes cannot address adequately the competition issues presented by large technology companies and that a special set of rules or revisions to the antitrust laws are necessary to regulate their conduct. Others have argued that existing antitrust doctrine and processes are well-equipped to address any potential anticompetitive conduct by large technology companies, but have warned that such doctrine and processes are ill-suited to addressing non-economic questions such as the political power of specific companies. In this paper, we address the role of antitrust policy as it pertains to large platforms, focusing in particular on one important area of this debate: what restrictions, if any, should apply when a firm with a large market share in one market begins to operate in another market, either by de novo entry (e.g., product innovation) or through acquisition.

Google and the Trans-Atlantic Antitrust Abyss

During the late 2000s, several jurisdictions, including the EU and the U.S., opened investigations into potential antitrust violations by the Internet search firm, Google, for alleged bias in the ranking of the links returned in response to search queries. While the EU investigations in 2017 resulted in a record EUR 2.42 billion fine (with further proceedings pending), the U.S. proceeding came to a close in 2013 with a brief statement by the Federal Trade Commission exonerating Google of antitrust law violations. These diametrically opposed outcomes occurred despite the similarity at the core of the single-firm antitrust doctrine that prevails on the two sides of the Atlantic and the near indistinguishability of the factual allegations of Google’s conduct raised in the two jurisdictions. In this paper, we outline and compare the merits of the two cases in an attempt to reconcile the different outcomes, with a particular focus on the theories of harm examined by the two agencies and the supporting evidence they considered. We ultimately observe that the EU in this case applied a more encompassing legal standard for abuse than in past cases. Specifically, the EU Google Search (Shopping) matter appears to have moved away somewhat from the characteristically American consumer welfare standard, as employed by the FTC in its consideration of Google search. Rather, DG COMP appeared to apply a legal standard more closely resembling the characteristically German ordoliberal approach, which focuses on impediments to the competitive market process and the preservation and promotion of consumer choice. However, because the EU did not specify the legal standard under which it was proceeding, its reasoning is opaque, so that many of the same concerns motivating the decision by the FTC to close its investigation without action inexplicably seem to have motivated the EU to declare an infringement of EU competition law and levy a record-breaking fine.

Antitrust in the Internet Era: The Legacy of United States v. A&P

Critics from both the right and the left claim that modern antitrust doctrine, rooted in consumer welfare, is inadequate to handle the challenges of the twenty-first century economy. They express nostalgia for 1960s antitrust, when the field had no clear objectives and cases were decided on impressionistic notions of “fairness” and good corporate citizenship. This article exposes the intellectual void at the heart of this new populist movement and begins by following Justice Holmes’ tenet that “a page of history is worth a volume of logic.” More than 80 years ago, the AP then “big box” brick-and-mortar stores; and now online retailers—have challenged traditional retail models by offering consumers lower prices and greater convenience. For decades, critics across the political spectrum have reacted to such disruption by urging Congress, the courts, and the enforcement agencies to stop these American success stories by revising antitrust doctrine to protect small businesses rather than the interests of consumers. Using antitrust law to punish pro-competitive behavior makes no more sense today than it did when the government attacked A&P for offering consumers too good a deal on groceries. In addition, antitrust doctrine does not need an overhaul. It is shaped by many economic perspectives, follows no one “School,” and is flexible enough to address any monopoly abuses in today’s economy. It is also well-calibrated to serve its central function: promoting consumer welfare. It does so not only by prohibiting conduct that harms consumers in the long run, but also by avoiding interference with conduct that might appear problematic to non-economists but that demonstrably benefits consumers over time. Antitrust remains a work in progress, but it is far superior to any alternative that the critics propose.