By Miguel Antón, José Azar, Mireia Giné & Luca X. Lin – Acquisitions are on average value-destroying for acquirer shareholders, while it has been shown that non-merging rivals generally gain after such “bad deals.” Value-destroying acquisitions have been largely attributed to managerial discretion, yet why do shareholders approve such decisions? This article illustrates that acquirer… Continue reading Does Common Ownership Increase Incentives for Mergers and Acquisitions?
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Revival of the Essential Facility Doctrine is not Essential; Joint Agency Guidelines will Better Strengthen Monopolization Law
The Executive Branch, Congress, and the federal enforcement agencies are focused on the competitive impact of large, allegedly dominant technology platform companies. The House’s Competition in Digital Markets majority report recommends major changes to antitrust law, but such changes are unlikely to be adopted. The Federal Trade Commission has adopted an expansive policy statement on the… Continue reading Revival of the Essential Facility Doctrine is not Essential; Joint Agency Guidelines will Better Strengthen Monopolization Law
Upward Pricing Pressure from Digital Platforms’ Imposition of Take Rates on App Developers
The vertical relationship between digital platforms and the app developers that ply their wares on such marketplaces (e.g. App Store, Play Store, Oculus Store) imposes a largely ignored upward pricing pressure on prices. Digital platforms aim to create walled gardens, leveraging lock-in to cabin consumer substitution within the platform’s boundaries. Digital marketplace owners are largely… Continue reading Upward Pricing Pressure from Digital Platforms’ Imposition of Take Rates on App Developers
Regulating Machine Learning: The Challenge of Heterogeneity
Machine learning, or artificial intelligence, refers to a vast array of different algorithms that are being put to highly varied uses, including in transportation, medicine, social media, marketing, and many other settings. Not only do machine-learning algorithms vary widely across their types and uses, but they are evolving constantly. Even the same algorithm can perform… Continue reading Regulating Machine Learning: The Challenge of Heterogeneity
Antitrust Enforcers Intensify Scrutiny of Private Equity Deals
Over the last several years, private equity firms have faced an increasingly aggressive antitrust enforcement environment, both in the U.S. and abroad. This increased scrutiny has involved more than just skepticism regarding private equity’s suitability as a divestiture buyer — the U.S. Department of Justice, Federal Trade Commission and antitrust agencies in Europe are also… Continue reading Antitrust Enforcers Intensify Scrutiny of Private Equity Deals
Antitrust’s Increasingly Long Arm: (Minority) Private Equity Investors Beware
Where do competition, antitrust, and private equity intersect? Once antitrust’s favored child compared to strategic buyers, private equity seems to have fallen from competition enforcers’ grace. Interestingly, this is part of a broader trend: financial investors in general, from BlackRock to Blackstone, have come into the antitrust spotlight. Being a minority financial investor is no… Continue reading Antitrust’s Increasingly Long Arm: (Minority) Private Equity Investors Beware
Understanding Basic Principles and Facts About Antitrust to Create a Basis for Some (Any?) Consensus
The debates around antitrust reform have sometimes involved participants taking extreme positions. In some sense, this is good because it helps attract attention and there has been lots of attention from politicians, policy makers, academics, and the public. But it is not good if the debate winds up creating myths that are unhelpful in forging… Continue reading Understanding Basic Principles and Facts About Antitrust to Create a Basis for Some (Any?) Consensus
Market Power in Supply Chains
As supply chains have grown in sophistication and complexity, so too have the competition issues they raise. Years of consolidation and rising concentration in the critical middle segments of major supply chains have created market power “bottlenecks.” These bottlenecks have a number of important implications. For example, dominant firms and oligopolies in these middle markets… Continue reading Market Power in Supply Chains
Regulatory Humility: Should Legislators Rethink Plans to Overhaul Online Marketplaces?
Over the past several decades, tech companies have innovated to provide great products to consumers for free. While most people are happy about this, politicians seem not to be. Driven by the perception that tech needs fixing, in the U.S., Europe, and recently Asia, politicians have begun proposing disruptive antitrust legislation targeting tech companies. Many of these proposals seek, in some form,… Continue reading Regulatory Humility: Should Legislators Rethink Plans to Overhaul Online Marketplaces?
Antitrust and Big Tech Breakups: Piercing the Popular Myths by Cautious Inquiry
“Break ‘em up with antitrust” is a popular and surging political drumbeat. This essay argues for a closer look at history and experience. They show that breakups of integrated single firm monopolies (which were not the product of mergers) have been rare and difficult. The essay takes a special look at the breakup of Ma… Continue reading Antitrust and Big Tech Breakups: Piercing the Popular Myths by Cautious Inquiry