The Digital Economy

Three artificial intelligence experts at the University of Chicago disclose the trends and issues regarding AI that they'll be watching for in 2024.

The following is an excerpt from Ignacio Cofone’s new book, “The Privacy Fallacy: Harm and Power in the Information Economy,” out now.

The European Union’s Digital Markets Act (DMA), designed to regulate Big Tech, supplements current antitrust laws that pursue case-by-case analyses of business conduct with general rules to block potentially anticompetitive behaviors. Detractors criticize the DMA for its lack of nuance. Supporters applaud its general principles as a necessary bulwark against Big Tech’s market powers, which current case-by-case analysis has been unable to rein in. However, neither side appreciates the true complexity of the DMA or how its principles interact to prevent anticompetitive behavior, writes Alba Ribera Martínez.

Recent antitrust interventions have put forward behaviorally informed theories of harm. However, they have adopted a deterministic model of behavior, missing the nuances that allow behavioral economics to provide a richer picture of people’s conduct. The recently concluded Google trial, grounded on the stickiness of defaults, is a good example. A more careful application of behavioral economics would have shown how Google’s purchase of default search engine status was a part of a broader monopolization plan. It would also show why the dominant remedy, forced choice, would have negligible effects.

Large digital platforms have evolved into vast multimarket/multiproduct conglomerates, both organically and through a decade-long acquisition spree. Conduct and mergers can no longer be evaluated “market-by-market.” Yet the antitrust assessment of these “ecosystems” is still in its infancy, and regulators seeking to explore harm arising from the control of multiple assets and capabilities are falling back on traditional theories of harm that are more likely to resonate with judges. Substantive progress is unlikely to emerge spontaneously from consultants or academia, and regulators will need to harness interest in this space by motivating and coordinating relevant policy research, argues Cristina Caffarra.

ProMarket student editor Surya Gowda reviews the arguments made by Paul Gowder in his new book, The Networked Leviathan: For Democratic Platforms.

In the 1990s, a host of antitrust rules impacting the television industry were repealed. Today’s streaming giants are exploiting the rollback and vertically integrating, a trend that will reduce the quality of TV shows and send us back to the era of network giants.

In light of the rise of generative artificial intelligence (AI) and recent debates about the socio-political implications of large-language models and chatbots, Manuel Wörsdörfer analyzes the strengths and weaknesses of the European Union’s Artificial Intelligence Act (AIA), the world’s first comprehensive attempt by a government body to address and mitigate the potential negative impacts of AI technologies. He recommends areas where the AIA could be improved.

In new research, Manuel Wörsdörfer compares the philosophies of two formative antitrust thinkers writing in the late 19th and early 20th centuries in the United States and Europe: Louis D. Brandeis and Walter Eucken. A discussion of their body of thought highlights the antitrust concerns of the time and how their positions can be adapted to today’s regulatory environment, particularly regarding Big Tech.

Big Tech’s efforts to push Federal Trade Commission Chair Lina Khan and Assistant Attorney General Jonathan Kanter to recuse themselves from participating in lawsuits against the companies due to prior work have no legal basis and are naked efforts to weaken agency enforcement, writes Laurence Tribe.