Amazon\u27s Antitrust Paradox

Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm’s structure and conduct pose anticompetitive concerns – yet it has escaped antitrust scrutiny. This Note argues that the current framework in antitrust – specifically its pegging competition to “consumer welfare,” defined as short-term price effects – is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational – even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors. This Note maps out facets of Amazon’s dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon’s structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon’s power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties

The Ideological Roots of America\u27s Market Power Problem

Mounting research shows that America has a market power problem. In sectors ranging from airlines and poultry to eyeglasses and semiconductors, just a handful of companies dominate. The decline in competition is so consistent across markets that excessive concentration and undue market power now look to be not an isolated issue but rather a systemic feature of America’s political economy. This is troubling because monopolies and oligopolies produce a host of harms. They depress wages and salaries, raise consumer costs, block entrepreneurship, stunt investment, retard innovation, and render supply chains and complex systems highly fragile. Dominant firms’ economic power allows them, in turn, to concentrate political power, which they then use to win favorable policies and further entrench their dominance. As a few technology platform companies mediate a rapidly growing share of our commerce and communications, the problem will only worsen. Since these gatekeeper firms have captured control over key distribution networks, they can squeeze the businesses reliant on their channels. Furthermore, these firms leverage their platform power into new lines of business, extending their dominance across sectors. Their muscle, in turn, spurs additional consolidation, as both competitors and producers bulk up in order to avoid getting squashed. Concentration begets concentration

The Separation of Platforms and Commerce

A handful of digital platforms mediate a growing share of online commerce and communications. By structuring access to markets, these firms function as gatekeepers for billions of dollars in economic activity. One feature dominant digital platforms share is that they have inte­grated across business lines such that they both operate a platform and market their own goods and services on it. This structure places domi­nant platforms in direct competition with some of the businesses that de­pend on them, creating a conflict of interest that platforms can exploit to further entrench their dominance, thwart competition, and stifle innovation. This Article argues that the potential hazards of integration by dominant tech platforms invite recovering structural separations. Separations regimes limit the lines of business in which a firm can engage, either by proscribing entry in certain markets or by requiring that distinct lines of business be operated through separate affiliates. Previously implemented both as a standard regulatory intervention and key antitrust remedy in network industries, structural separations have been largely abandoned. At the same time that lawmakers have weak­ened or eliminated sector-specific regulatory regimes, judicial interpre­tation of antitrust law has drastically narrowed the forms of vertical conduct and structures that register as anticompetitive. And when antitrust enforcers have targeted these forms of conduct and structures, they have applied remedies that generally (1) fail to target the under­lying source of the problem and (2) overwhelm the institutional capacities of the actors assigned to oversee them. Neglecting struc­tural remedies results in both substantive harms and institutional misalignments – effects that are especially pronounced in digital platform markets. This Article seeks to give structural separations a seat back at the table. Tracing the history of separations reveals that they have been motivated by a host of functional goals, ranging from fair competition and system resiliency to media diversity and administrability. Recalling this broader set of concerns brings into focus the range of factors at stake when dealing with dominant intermediaries and invites consideration of the degree to which separations in platform markets would also respond to a diverse set of problems

The End of Antitrust History Revisited

This Review engages Tim Wu’s book, The Curse of Bigness, to explain the significance of the current rupture in antitrust and to situate it within a broader intellectual trajectory. Debates over the foundational purpose of antitrust are not new, and examining how this latest clash fits alongside previous contestations is essential for understanding what has yielded the current contestability and assessing the competing visions. Part I of this Review summarizes Wu’s chief contributions in his recent work, focusing on three tenets that form the basis of the book. Part II offers an analytic breakdown of the overhaul in antitrust doctrine that is the subject of Wu’s critique, tracing the transformation of antitrust to changes in descriptive claims and normative assumptions that the Chicago School introduced. I argue that framing Chicago’s interventions this way lets us map the current antitrust debate with greater coherence. Doing so, moreover, reveals the limits of proffered correctives to the Chicago School and underscores the need for what has been called a “Neo-Brandeisian” program in law and political economy. Part III argues that a central component of the Neo-Brandeisian project should include reforming the institutional structure of antitrust law and policy. Although most critiques of present-day antitrust focus on doctrinal rules and the substantive legal framework that governs antitrust analysis, the exclusive reliance on a common law approach to antitrust is a key source and enabler of current dysfunctions. Complementing this common law structure with an administrative approach and adopting clear rules that curb judicial discretion would help democratize antitrust in the ways that Wu and other reformers champion

Q&A with Lina Khan, Chair of the U.S. Federal Trade Commission and Mark Glick, Professor of Economics at the University of Utah

Let me tell you a little about Lina. Lina attended Yale Law school and while a third-year law student she wrote her famous and influential article Amazon’s Anti-Trust Paradox. Then, after graduating from law school, she worked as the legal director at the Open Markets Institute and during that period she continued to write a large number of influential antitrust papers. She then joined the faculty of my alma mater, Columbia Law School. In 2019, she was appointed as counsel to the U.S. House Judiciary Subcomittee on Antitrust, Commercial, and Administrative Law and, in 2021, President Biden appointed her as Chair of the Federal Trade Commission (FTC). Quite a trajectory for a young scholar. With that, I’d like to welcome our keynote speaker, Lina Khan, the Chair of the Federal Trade Commission. We have some questions for you Lina, but before I start, I just want to say that you were here in Utah in 2019 and that was before your appointment to the FTC. At that time, you made a lot of fans here, and we’re still fans. Welcome back Madam Chair

Market Power and Inequality: The Antitrust Counterrevolution and Its Discontents

In recent years, economic inequality has become a central topic of public debate in the United States and much of the developed world. The popularity of Thomas Piketty’s nearly 700-page tome, Capital in the Twenty-First Century, is a testament to this newfound focus on economic disparity. As top intellectuals, politicians, and public figures have come to recognize inequality as a major problem that must be addressed, they have offered a range of potential solutions. Frequently mentioned proposals include reforming the tax system, strengthening organized labor, revising international trade and investment agreements, and reducing the size of the financial sector. One underexplored theme in this larger debate is the role of monopoly and oligopoly power. Given the current distribution of business ownership assets in the United States, market power can be a powerful mechanism for transferring wealth from the many among the working and middle classes to the few belonging to the 1% and 0.1% at the top of the income and wealth distribution. In concrete terms, monopoly pricing on goods and services turns the disposable income of the many into capital gains, dividends, and executive compensation for the few. Evidence across a number of key industries in the United States indicates that excessive market power is a serious problem. Firms in industries ranging from agriculture to airlines collude, merge and exclude rivals, and raise consumer prices above competitive levels, while pushing prices below competitive levels for suppliers. The aggregate wealth transfer effect from pervasive monopoly and oligopoly power is likely, at a minimum, hundreds of billions of dollars per year

The Case for “Unfair Methods of Competition” Rulemaking

A key feature of antitrust today is that the law is developed entirely through adjudication. Evidence suggests that this exclusive reliance on adjudication has failed to deliver a predictable, efficient, or participatory antitrust regime. Antitrust litigation and enforcement are protracted and expensive, requiring extensive discovery and costly expert analysis. In theory, this approach facilitates nuanced and factspecific analysis of liability and well-tailored remedies. But in practice, the exclusive reliance on case-by-case adjudication has yielded a system of enforcement that generates ambiguity, drains resources, privileges incumbents, and deprives individuals and firms of any real opportunity to participate in the process of creating substantive antitrust rules. It is difficult to quantify this harm. This Essay argues that rulemaking under § 5 of the Federal Trade Commission Act should supplement antitrust adjudication, and that this institutional shift would lower enforcement costs, reduce ambiguity, and facilitate greater democratic participation. We build on existing scholarship to debunk the view that the Federal Trade Commission (FTC) does not have competition rulemaking authority pursuant to the Administrative Procedure Act conferring Chevron deference, and trace legislative history to underscore how Congress designed the FTC to play a unique institutional role. We close by outlining an initial set of factors that should weigh in favor of rulemaking: when there is significant learning from past enforcement and when private litigation would be unlikely. Finally, we pose questions in the context of the FTC’s recent hearings to prompt further discussion on where this unused tool would be most usefu

Arbitration as Wealth Transfer

Over the last few decades, the Supreme Court has steadily expanded the reach of forced arbitration clauses – clauses that companies embed in the fine print of standard-form contracts to deny consumers and workers the right to band together to sue those corporations in court. While the Court’s decisions that set this trend in motion trace back to the 1980s, the real game changers have been more recent: 2010’s Rent-A-Center v. Jackson, holding that arbitration clauses must be enforced even when they are part of an illegal contract; 2011’s AT&T Mobility v. Concepcion, granting companies the unfettered right to enforce clauses that ban class actions; and 2013’s American Express Co. v. Italian Colors Restaurant, requiring enforcement even when doing so has the practical effect of completely precluding redress under a law enacted by Congress