ICYMI: FTC Hearings Emphasize Soundness Of Existing Antitrust Policy
Earlier today, the FTC held its first in a series of Hearings on Competition and Consumer Protection in the 21st Century at the Georgetown University Law Center. Leaders in competition policy from across the political spectrum convened to discuss how the FTC can continue to best protect consumers.
Highlights below.
Don’t punish a firm just for being successful:
Janet McDavid, Hogan Lovells US LLP: “Instead of well-established principles grounded in consumer welfare and sound economic analysis, we would be applying amorphous concepts of bigness and fairness, some of which turn traditional principles on their heads, such as lower prices that don’t have the underpinnings of a predatory pricing analysis, or penalizing large successful technology companies simply for being successful because they provided new products or services that consumers genuinely desired.”
Jonathan Baker, American University Washington College of Law: “A large and profitable firm’s size and success alone doesn’t mean antitrust has failed. Firms can and do grow large and become successful by providing customers with valuable products and services and that includes large technology companies. We want to encourage firms to grow successful and profitable by offering better and cheaper products and services.”
Joshua Wright, George Mason University Antonin Scalia Law School: “The question is sort of assuming arguendo the increase in market power — is that a bad thing. I think my ten seconds is almost up, but I will say I’m not sure that premise has been established.”
Concentration does not define monopoly action:
Steven Berry, Yale University Department of Economics: “A graduate student of mine did as part of his thesis. He looked at the wholesale sector, that’s pretty important, that’s a pretty important sector, right? And what does he find? Concentration is up. Aha! Concentration is up. On the other hand output is up. that doesn’t sound like monopolization, does it? Output is up.”
Joshua Wright, George Mason University Antonin Scalia Law School: “Competition and concentration are different things. Concentration can be caused by more competition, it could be caused by less competition.”
Steven Berry, Yale University Department of Economics: “The IT example is good, I think, they have high markups, they have high profits. For many good reasons they have high markups. Sort of slightly opposite from John, it’s not just market power, right? It’s a combination of market power and doing things that people want and gaining efficiencies. So it’s not, as I said before, it’s not bad per se.”
“Populist antitrust” is misguided:
Timothy Muris, George Mason University Antonin Scalia Law School: “Populism is reflected in calls, and Chairman Simon mentioned this, on the left and the right, to use antitrust to dismantle the highly successful companies — or at least the so-called tech companies, or at least regulate them as public utilities. These are misguided calls. For one thing, what a tech or digital company is, is hard to know. We have new technologies, but they’re being diffused through the economy. Moreover, these companies have different positions in the market; some have big market shares, some don’t. Equally as important, we’ve been down the populist road before with disastrous consequences.”
David Vladeck, Georgetown University Law Center: “Dealing with platforms is an issue that rises on both sides of the building. For example, I mean, one of the ironies in the Google investigation, were the companies that were complaining about anticompetitive conduct were the very companies that wouldn’t have existed but for Google.”