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

Innovation misunderstood

Innovation is transformative and key to future prosperity. It is therefore of no surprise that antitrust laws seek to promote it. What is surprising, however, is that despite the central role that innovation occupies in competition cases, its actual treatment by the courts is far from nuanced. In this paper, we reflect on the D.C. Circuit’s 2023 ruling in N.Y. v Meta to illustrate the prevailing monocular vision adopted by the court in its treatment of innovation. That vision, we argue, reflects simplistic assumptions as to innovation dynamics and mistaken beliefs about the digital economy. It is further compounded by jurisprudential problems that characterize U.S. antitrust laws. The result is troublesome. While “everyone talks about innovation,” the courts do little to inquire on its scope, nature, and value. Nor do courts recognize the impact of anticompetitive strategies deployed by the dominant platforms on disruptive innovations and their heterogeneity

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