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Antitrust and Competition

A key distinction in economic viewpoints that goes oft-unnoticed is between pro-business and pro-market. A good bellwether to where someone stands on the pro-business/market continuum is his/her stance on antitrust policy: pro-business usually favors incumbents, while pro-market calls for aggressive antitrust enforcement to facilitate competition.
“I would not dispute that even a monopoly-ridden market would be preferable to any economic system trying to operate without any kind of a market. But given the prevalence or the danger of substantial intrusion of monopoly into the market, the logic of the laissez faire defense of the market against state-intervention collapses and there is called for instead, by its very logic, state-suppression or state-regulation of monopoly practices, which one may wish to call, as Henry Simons called it, an instance of “positive laissez faire” or, as I prefer, as an instance of deliberate departure from laissez faire.” Jacob Viner – The Intellectual History of Laissez Faire (1960)

Antitrust and Competition

The Eight Features Defining Emergent Competition Policy for the Digital Era

Oles Andriychuk
Drawing on new research, Oles Andriychuk identifies eight defining features of the European Union’s and United Kingdom’s new laws to regulate competition in digital markets that transform how we understand competition policy.
Antitrust and Competition

What Is the Role of Economics in Merger Review?

Eric A. Posner
Eric Posner discusses why many antitrust professionals believe the law follows economic interpretation, despite the absence of economics in the relevant statutes. He argues that antitrust laws themselves have been resistant to adopting a coherent "economic theory" approach, leading to a tension between the economic views of agencies and academics versus the legal interpretations taken by courts.
Antitrust and Competition

First Evidence on the Use of Training Repayment Agreements in the US Labor Force

J.J. Prescott
Similar to noncompete clauses in employment contracts, training repayment agreements, which require employees to pay back their employers for firm-sponsored training if they quit early, can impede worker mobility and reduce competition in labor markets. The authors document the pervasiveness and characteristics of these provisions and suggest directions for future research.
Antitrust and Competition

The European Commission Fines Apple 1.84 Billion Euros and Spotify Still Isn’t Happy

Randy Picker
The European Commission has fined Apple for abusing its App Store. The Commission did not mention Spotify, but the fine appears to answer the music streaming platform’s complaint that Apple’s App Store fees to developers are too high. But now that Spotify has seen Apple’s new approach under Europe’s new Digital Markets Act, Spotify is still unhappy, highlighting the flaws of Spotify’s original complaint and the Commission’s fine, writes Randy Picker.
Antitrust and Competition

The Antitrust Agencies’ Focus on Monopolization Claims Against Big Tech Dilutes the Meaning of Monopoly

Herbert Hovenkamp
The various antitrust complaints the Department of Justice and the Federal Trade Commission have brought against Google, Amazon, and Facebook are based on monopolization claims under Section 2 of the Sherman Act. Herbert Hovenkamp explains why the government should also  have relied on Section 1 of the Sherman Act and Section 7 of the Clayton Act to support their Big Tech cases.
Antitrust and Competition

Management Studies Offers Antitrust a More Sophisticated Picture of Firm Behavior

Shilpi Bhattacharya
Neoclassical economics, which places the rational and well-informed actor maximizing utility at its foundation, underpins the dominant schools of thought on firm behavior in antitrust. Although neoclassical economics assumes that firms maximize profit, it has little to say on the actual decision-making processes within firms that drive firm conduct. In part, this is because neoclassical economists view the firm as a “black box,” whose decision-making behavior is too idiosyncratic or obscure to link to output and performance. At the same time, neoclassical assumptions about firm rationality and profit maximization mean that whatever these idiosyncratic behaviors of the individual firm may be, they are designed to maximize profit and returns to owners. Thus, firm decisions can be presumed to be rational.
Antitrust and Competition

Do Corporate Mergers and Acquisitions Hurt Workers?

David Arnold
Competition authorities and analysts are increasingly focused on the impact of mergers and acquisitions on worker welfare. Using a novel dataset on Canadian firms and workers, David Arnold, Kevin Milligan, Terry S. Moon and Amirhossein Tavakoli test the empirical validity of several theories on how M&A may help or harm workers.
Antitrust and Competition

The Purchase of Unionized Labor Is a Relevant Buyer-Side Market in the Kroger-Albertsons Merger

Steven Salop
Critics of the Federal Trade Commission’s lawsuit last week to block the Kroger-Albertsons merger claim that the agency incorrectly limits the relevant buyer-side market to unionized grocery workers. Steve C. Salop argues that the critics are wrong, and that standard antitrust analysis shows the FTC has it right.
Antitrust and Competition

Refuting the Myths Defending the JetBlue-Spirit Merger

William J. McGee
For the first time in decades, the Department of Justice filed suit against an airline merger—and won. William McGee argues that the next fight is correcting false assertions concerning JetBlue and Spirit for the sake of future potential mergers, such as one between Alaskan and Hawaiian Airlines.
Antitrust and Competition

History Provides Inspiration for a Stronger Alliance Between Labor and Antimonopoly Advocates

Kate Andrias
Although the antimonopoly neo-Brandeisians and the labor movement share many goals, including a desire to reduce the power of big business, significant tensions exist, such as labor’s past support for mergers when they advance the ability of workers to unionize. Kate Andrias traces the history of labor’s relation with antitrust to show that, despite historical and contemporary tensions, there have also been deep connections between the two movements that show how they can better complement each other in the future.
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ProMarket is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Policy.