The Digital Economy

One of the questions that Elon Musk’s lawsuit against OpenAI and its CEO, Sam Altman, raises is whether Microsoft’s involvement in changes to OpenAI’s board in November violated nonprofit law. Benjamin Leff assesses this challenge and if current nonprofit law is capable of monitoring nonprofit behavior in its current form.

Two professors of law assess the merits and questions raised by Musk's recent lawsuit against OpenAI and its CEO, Sam Altman.

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.

Elon Musk recently sued OpenAI over claims that the company has strayed from its social mission and has instead focused on profit maximization. Roberto Tallarita examines how Musk’s lawsuit shows well-intentioned corporate planners how hard it is to commit to an effective and enforceable social purpose and warns policymakers that relying on corporate self-regulation of AI could be a fatal mistake.

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.

Luigi Zingales argues that Elon Musk is right to sue OpenAI and CEO Sam Altman, given the economic principles at stake.

In new research, Monika Leszczyńska explores how consumers’ ideas of morality should inform government agencies and courts as they seek to update and enforce consumer protection laws. The focus is on adapting these laws to address modern business practices in the digital age. These practices involve behavioral manipulation of consumers, resulting in non-monetary damages, such as the invasion of privacy.

At the heart of the United States Google Search case is the monopolizing effect of Google securing for its own search offering the status of default search engine on a web browser, such as Safari, Chrome, or Firefox. The authors review the behavioral economics and empirical evidence of this effect and suggest several conduct and structural remedies to open up the search market to competition.

In new research, Giovanna Massarotto explains how collusion manifests differently in the digital economy. She argues that antitrust regulators, scholars, and courts need to incorporate lessons from computer science to update how they monitor markets and identify algorithmic collusion.

Following the Federal Trade Commission’s 2021 publication of “Nixing the Fix: An FTC Report to Congress on Repair Restrictions,” private “right to repair” cases have multiplied against companies that leverage their market power in a “primary equipment market” (e.g., tractors) to force their customers also to purchase their offerings in “aftermarkets” (e.g., tractor repairs) that otherwise would be competitive. Daniel McCuaig argues that the application of the 1992 Supreme Court decision in Eastman Kodak Co. v. Image Technical Services, Inc. to these cases misunderstands that case and improperly shields monopolists from competitive pressures, including in Epic’s recent case against Apple.