Looking at the Monopsony in the Mirror

Although still a distant second to monopoly, buyer power and monopsony are hot topics in the competition community. The Organisation for Economic Co-operation and Development(OECD), International Competition Network(ICN), and American Antitrust Institute(AAI) have studied monopsony and buyer power recently. The U.S. Department of Justice and Federal Trade Commission pay more attention to buyer power in their 2010 merger guidelines than they did in their earlier guidelines. With growing buyer concentration in commodities such as coffee, tea, and cocoa, and among retailers, buyer power is a human rights issue

Digital platforms inhibit innovation to address today’s most pressing issues

The large research and development expenditures of the leading digital platforms (Alphabet-Google, Apple, Meta-Facebook, Amazon, and Microsoft) may send an image of beneficial investment and innovation, but the reality is that they suppress healthy innovators by depriving them of the “oxygen” needed to survive. Ariel Ezrachi and Maurice E. Stucke write that we should not be betting on tech barons’ ecosystems to deliver much-needed innovations to address pressing needs like global warming, wealth inequality, social unrest, growing population, and threats to democracy. They propose three principles to guide future policies aimed at promoting innovation in the digital economy

SUSTAINABLE AND UNCHALLENGED ALGORITHMIC TACIT COLLUSION

Algorithmic collusion has the potential to transform future markets, leading to higher prices and consumer harm. And yet, algorithmic collusion may remain undetected and unchallenged, in particular, when it is used to facilitate conscious parallelism. The risks posed by such undetected collusion have been debated within antitrust circles in Europe, the US, and beyond. Some economists, however, downplay algorithmic tacit collusion as unlikely, if not impossible. “Keep calm and carry on,” they argue, as future prices will remain competitive. This paper explores the rise of algorithmic tacit collusion and responds to those who downplay it, by pointing to new emerging evidence and the gap between law and this particular economic theory. We explain why algorithmic tacit collusion is not only possible but warrants the increasing concerns of many enforcers

Digital platforms inhibit innovation to address today’s most pressing issues

The large research and development expenditures of the leading digital platforms (Alphabet-Google, Apple, Meta-Facebook, Amazon, and Microsoft) may send an image of beneficial investment and innovation, but the reality is that they suppress healthy innovators by depriving them of the “oxygen” needed to survive. Ariel Ezrachi and Maurice E. Stucke write that we should not be betting on tech barons’ ecosystems to deliver much-needed innovations to address pressing needs like global warming, wealth inequality, social unrest, growing population, and threats to democracy. They propose three principles to guide future policies aimed at promoting innovation in the digital economy

The Effective Competition Standard: A New Standard for Antitrust

America’s failing antitrust system is, in large part, to blame for today’s market power problem. Lax antitrust law and enforcement have allowed troubling trends like corporate consolidation to remain unchallenged, further embedding our skewed economy. In highly concentrated markets, individuals have limited choice and little power to pick their price, quality, or provider for the goods and services they need; workers are met with powerful employers and have little agency to shop around or bargain for competitive wages and benefits; and suppliers can’t reach the market without paying powerful intermediaries or succumbing to acquisition. Our Essay offers an alternative to the courts’ consumer welfare standard. Ambiguous and inadequate, the consumer welfare standard identifies threats to competition only by the potential consequences for consumers and ignores adverse effects on workers, suppliers, product quality, and innovation. Our effective competition standard would restore the primary aim of antitrust laws—namely, to promote competition wherever in the economy it has been compromised, including throughout supply chains and in the labor market. These changes are essential to protect competitive markets in the United States, as well as individuals and the economy at large, by deconcentrating private power