Showing archive for: “Error Costs”
A First Glance at the Biden Executive Order on Competition: The Good and the Bad (Including Much that Looks Ugly)
The Biden Administration’s July 9 Executive Order on Promoting Competition in the American Economy is very much a mixed bag—some positive aspects, but many negative ones. It will have some positive effects on economic welfare, to the extent it succeeds in lifting artificial barriers to competition that harm consumers and workers—such as allowing direct sales ... A First Glance at the Biden Executive Order on Competition: The Good and the Bad (Including Much that Looks Ugly)
FTC Competition Rulemaking Flunks a Cost-Benefit Test
There is little doubt that Federal Trade Commission (FTC) unfair methods of competition rulemaking proceedings are in the offing. Newly named FTC Chair Lina Khan and Commissioner Rohit Chopra both have extolled the benefits of competition rulemaking in a major law review article. What’s more, in May, Commissioner Rebecca Slaughter (during her stint as acting ... FTC Competition Rulemaking Flunks a Cost-Benefit Test
The Virtues and Pitfalls of Economic Models
Interrogations concerning the role that economic theory should play in policy decisions are nothing new. Milton Friedman famously drew a distinction between “positive” and “normative” economics, notably arguing that theoretical models were valuable, despite their unrealistic assumptions. Kenneth Arrow and Gerard Debreu’s highly theoretical work on General Equilibrium Theory is widely acknowledged as one of ... The Virtues and Pitfalls of Economic Models
The Globalization of Antitrust: A Cost-Benefit Appraisal
Overview Virtually all countries in the world have adopted competition laws over the last three decades. In a recent Mercatus Foundation Research Paper, I argue that the spread of these laws has benefits and risks. The abstract of my Paper states: The United States stood virtually alone when it enacted its first antitrust statute in ... The Globalization of Antitrust: A Cost-Benefit Appraisal
The Future of FTC Equitable Monetary Relief after AMG Capital Management
The U.S. Supreme Court’s just-published unanimous decision in AMG Capital Management LLC v. FTC—holding that Section 13(b) of the Federal Trade Commission Act does not authorize the commission to obtain court-ordered equitable monetary relief (such as restitution or disgorgement)—is not surprising. Moreover, by dissipating the cloud of litigation uncertainty that has surrounded the FTC’s recent ... The Future of FTC Equitable Monetary Relief after AMG Capital Management
Antitrust by Fiat
The Competition and Antitrust Law Enforcement Reform Act (CALERA), recently introduced in the U.S. Senate, exhibits a remarkable willingness to cast aside decades of evidentiary standards that courts have developed to uphold the rule of law by precluding factually and economically ungrounded applications of antitrust law. Without those safeguards, antitrust enforcement is prone to be ... Antitrust by Fiat
How FTC v. Qualcomm Led to the Nvidia-Arm Acquisition
In a constructive development, the Federal Trade Commission has joined its British counterpart in investigating Nvidia’s proposed $40 billion acquisition of chip designer Arm, a subsidiary of Softbank. Arm provides the technological blueprints for wireless communications devices and, subject to a royalty fee, makes those crown-jewel assets available to all interested firms. Notwithstanding Nvidia’s stated ... How FTC v. Qualcomm Led to the Nvidia-Arm Acquisition
It’s All About What We Don’t Know
Nicolas Petit’s Big Tech and the Digital Economy: The Moligopoly Scenario provides an insightful and valuable antidote to this unease. While neither Panglossian nor comprehensive, Petit’s analysis persuasively argues that some of the concerns about the platforms are misguided or at least overstated. As Petit sees it, the platforms are not so much monopolies in ... It’s All About What We Don’t Know
The District Court’s FTC v. Qualcomm Decision Rests on Impermissible Inferences and Should Be Reversed
Last week the International Center for Law & Economics (ICLE) and twelve noted law and economics scholars filed an amicus brief in the Ninth Circuit in FTC v. Qualcomm, in support of appellant (Qualcomm) and urging reversal of the district court’s decision. The brief was authored by Geoffrey A. Manne, President & founder of ICLE, and ... The District Court’s FTC v. Qualcomm Decision Rests on Impermissible Inferences and Should Be Reversed
Lambert & Sykuta Comment to FTC on Common Ownership
The Federal Trade Commission will soon hold hearings on Competition and Consumer Protection in the 21st Century. The topics to be considered include: The state of antitrust and consumer protection law and enforcement, and their development, since the [1995] Pitofsky hearings; Competition and consumer protection issues in communication, information and media technology networks; The identification ... Lambert & Sykuta Comment to FTC on Common Ownership
Problems with Proposed Solutions to the Common Ownership Problem
Even if institutional investors’ common ownership of small stakes in competing firms did cause some softening of market competition—a claim that is both suspect as a theoretical matter and empirically shaky—the policy solutions common ownership critics have proposed would do more harm than good. Einer Elhauge has called for public and private lawsuits against institutional ... Problems with Proposed Solutions to the Common Ownership Problem
The Case for Doing Nothing About Common Ownership of Small Stakes in Competing Firms
One of the hottest antitrust topics of late has been institutional investors’ “common ownership” of minority stakes in competing firms. Writing in the Harvard Law Review, Einer Elhauge proclaimed that “[a]n economic blockbuster has recently been exposed”—namely, “[a] small group of institutions has acquired large shareholdings in horizontal competitors throughout our economy, causing them to ... The Case for Doing Nothing About Common Ownership of Small Stakes in Competing Firms
