Commentary

Two municipal market veterans, David Dubrow and Kent Hiteshew, delve into the history and current state of disclosure practices in the municipal bond market, highlighting the flaws in the current system. In a follow up, the authors will explore potential paths to reform and key components of a uniform standard of disclosure for municipal securities.

Richard R. John recounts how in the twentieth century the once-mighty Bell System, whose descendants include today’s Verizon and AT&T, waged a powerful decades-long public relations campaign, including the funding of history books and research centers, to persuade the public that its success rested in technological imperatives and economic incentives rather than a favorable regulatory landscape. Though the Bell PR campaign failed to stop three highly effective antitrust suits, it succeeded in establishing a story about management, competition, and innovation that many Americans—including several of today’s Big Tech critics—have uncritically repeated.

The financial market has moved from LIBOR to alternative interest-rate benchmarks, such as SOFR. Credit-sensitive rates, which are now becoming increasingly popular, carry greater risks than SOFR and other “risk-free rates” and must be used with great care. If not, United States legislators might need to step in to further stimulate the use of safter benchmark alternatives, writes Randy Priem.

Alessia D’Amico and Inge Graef discuss Mario Draghi’s proposal for a New Competition Tool to revamp competition in the European Union. They write the European Commission must think hard about its design to achieve the right balance.

Lulu Wang writes that the Department of Justice’s lawsuit against Visa for maintaining a monopoly in the debit card market will, if victorious, only impact a fraction of the transaction fees that burden merchants. And if the lawsuit opens up the market to more competition, there are reasons to believe a more fractured card network could end up hurting consumers and merchants.

Jonathan B. Baker and Fiona Scott Morton challenge the interpretations of two new papers from Carl Shapiro & Ali Yurukoglu and Nathan Miller, which question economy-wide trends toward a rise in market power and, if any such trend has occurred, that it is due to lax antitrust enforcement.

In his recent article, John Kwoka accepts the antitrust community’s general opinion that Procter & Gamble requires courts and the antitrust agencies to weigh plaintiff rebuttals that a merger can produce extraordinary efficiencies even if it reduces competition. Jerry Cayford argues that this is an inaccurate reading of the Supreme Court’s decision, and it has hampered enforcement for decades.

Mario Draghi’s report on raising European competitiveness contains two insights about competition policy. First, competition policy has a small but significant role to play in closing the “innovation gap” between the European Union, the United States and China. Second, increasing European productivity demands “revamping” competition through the introduction of technical-legal reforms.  

Roslyn Layton writes that proxy advisors, which provide voting services for shareholder meetings, can influence how publicly traded firms conduct their business. Two proxy firms–Glass Lewis and Institutional Shareholder Services (ISS)–have 97 percent of the market and have allowed some minority shareholders to exercise outsized influence.

Steven C. Salop writes that only Google’s full divestiture of its Android operating system can avoid incentives on the part of Android and Google to preference Google’s apps, including its search engine, and stifle competition.