The Role of the State

In new research, Wolfgang Kerber argues that the European Union's decision to require a third option in Meta's "consent or pay" model focuses too heavily on user consent and ignores the broader goal in the Digital Markets Act of reducing gatekeeper advantages and increasing competition.

In new research, Patrice Bougette, Frédéric Marty, and Simone Vannuccini propose that competition authorities add a conditional fine to antitrust cases that is activated when behavioral remedies are no longer effective.

As banks grow, tiered regulation places them in stricter categories to address their greater risks. In new research, Pedro M. Batista finds that transition periods between tiers might delay when some higher standards become mandatory, potentially leaving growing banks exposed while known risks remain unresolved, as happened with Silicon Valley Bank. Federal Reserve reforms should address this gap between growing risks and delayed safeguards.

Matt Lucky reviews Mariana Mazzucato’s new book The Common Good Economy: A new compass, now out at Basic Venture Group.

For decades antitrust agencies, courts, and scholars have debated whether Section 7 of the Clayton Act permits an efficiency defense, in which merging firms can argue that enhanced efficiencies from the merger show that it does not reduce competition. However, the Supreme Court’s recent establishment of the “major questions doctrine,” which enforces or re-enforces a textualist reading of regulatory statues, undermines proponents of the efficiency defense, because the Clayton Act does not clearly and explicitly contain an efficiency defense. The “major questions doctrine” essentially acts as textualism on steroids,” writes Robert H. Lande.

Financial crises routinely trigger sweeping overhauls of financial regulation, but whose interests do these reforms serve? In new research, Orkun Saka, Yuemei Ji, and Clement Minaudier find that political leaders facing term limits are much more likely to respond to financial crises by introducing reforms that benefit banks over the public or long-term financial stability. This phenomenon occurs more frequently in countries where the revolving door between politics and finance is common.

Firms can now charge each shopper a different price, and regulators worry that the gains will flow from consumers to companies. But personalized pricing has two built-in limits: shoppers learn to hide how much they want things, and cheap purchases can be resold, writes Nursultan Mukhtaruly.

In new analysis, Madhav Parikh examines how competition among banks in the United States shapes the way monetary policy reaches depositors. Tracking U.S. banks from late 2021 through mid-2026, he finds that banks in more concentrated local markets repriced their deposit interest rates less than banks in competitive markets, both as the Fed raised rates and as it cut them.

The Digital Markets Act establishes central rules and enforcement for digital platforms across the European Union, but allows decentralized private enforcement on the national level. In new research, Lena Hornkohl and Barbara Justen reflect on how two recent German court cases show how national litigation can make the DMA more effective, but also highlight the need for mechanisms that aid in consistent interpretation.

Consumers are anxious about the economy, and it’s due not only to inflation but to market power that raises prices and reduces quality, variety, and innovation. Policymakers’ prescriptions for resolving the cost-of-living crisis have mostly ignored the role of antitrust policy, but waning competition is at the heart of these problems, writes Diana L. Moss.