Posted by Social Science Research Network
By Mark R. Patterson (Fordham University)
Abstract: Markets run on information. Buyers make decisions by relying on information about the products available, and sellers decide what to produce based on information about what buyers want. But the ways in which this market information is acquired has changed, as consumers increasingly turn to sources that act as intermediaries for information — companies like Yelp and Google. In addition, various sorts of informational standards and certifications are playing a greater role in determining what goods sellers produce; the LIBOR benchmark interest rate, for example, can be seen as such a standard.
Antitrust Law in the New Economy considers a range of competition problems that involve information in the marketplace. Sellers sometimes have the ability and motivation to distort the truth about their products when they make data available to intermediaries like Google and Yelp. The intermediaries themselves, in turn, may have their own incentives to skew the information they provide to buyers, both to benefit advertisers and to gain advantages over their competition. And sellers that agree on product standards may do so in circumstances in which the standards merely eliminate competition or may adopt standard-setting processes that do not prevent manipulation by individual sellers.
Broadly speaking, competitive harm in th…