No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Antitrust in a Time of Populism
... 23 Auch wenn dieser Aufsatz keine umfassende Analyse 20 S. z. B. Böhm (1961) 21 S. für eine entsprechende Diskussion Shapiro (2017) 22 Für einen Überblick s. Bain (1968, insb. ...
... 35 Für die USA ist die Aussagekraft insbesondere aufgrund der räumlichen Marktabgrenzung, die sehr häufig eine lokale, nicht nationale ist, beschränkt. In vielen Fällen dürften ansteigende Konzentrationsmaße in diesem Kontext auf einen Übergang von lokalen zu nationalen Unternehmen mit besseren und billigeren Angeboten zurückzuführen sein, so jedenfalls Shapiro (2017). 36 Hunold et al. (2011). ...
... Gegebenenfalls scheitert dies an Gründen der statistischen Geheimhaltung der amtlichen Census-Daten. Zum vorgefundenen Anstieg der Konzentration sowie allgemein zu deren Niveau ist auf Basis der Eingangsanmerkungen zu den aus Sicht der Wettbewerbsbehörden als problematisch erachteten HHI-Werten nur festzustellen, dass wir uns 39 Zu einer ähnlichen Ansicht gelangt wohl auch Shapiro (2017), der die gefundenen Ergebnisse jedenfalls nicht kritisiert. Anders ist dies bei den Ansätzen von Grullon et al. (2017) und Gutiérrez und Philippon (2017) (2018) erfolgen. ...
Der Aufsatz diskutiert die jüngste Literatur zur Entwicklung von Unternehmenskonzentration und Gewinnmargen. Der an verschiedenen Stellen unterstellte Zusammenhang zwischen dem Anstieg dieser Größen und derjenigen der Einkommens- und Vermögensungleichheit wird evaluiert. Dabei zeigt sich, dass sehr hohe Einkommen und der Anstieg großer Vermögen häufig Resultat besonderer unternehmerischer Erfolge und damit in erster Linie Effizienz- und nicht Marktmachtgetrieben sind. Um einen möglichen Einfluss der Wettbewerbspolitik auf die Konzentrations- und Margenentwicklung zu überprüfen, werden die Aktivitäten der Wettbewerbsbehörden auf Ebene der USA, der EU und Deutschlands überblicksartig dargestellt und auf ihre Wirkungen hin analysiert. Der Befund ist über die verschiedenen Tätigkeitsbereiche und Jurisdiktionen hinweg uneinheitlich und reicht vom under-enforcement bis zum over-enforcement. Eindeutig scheint hingegen, dass eine zunehmende Regulierungsdichte negativ auf die Dynamik von Unternehmensgründungen wirkt und damit zum Anstieg der Konzentration beiträgt. Die Verteilungswirkungen der Wettbewerbspolitik scheinen beschränkt, Umverteilung erfordert andere Politikinstrumente.
... The previous point takes on special significance as a warning about efforts to change one implication of time travel but not another. Today, for example, there is growing consensus among antitrust scholars on the desirability of stronger enforcement of Section 7 against acquisitions of potential competitors, 204 especially in cases where the acquiring company is seen to occupy a dominant position. 205 Efforts to deliver this result are apparent in recent legislative proposals 206 and Agency policy discussions. ...
Entry defenses and potential competition doctrine have much in common. Both draw from predictions about future entry. Both demand difficult assessments of entry barriers and incentives. And both suffer from confused thinking today. This Article offers a clarifying perspective. Rather than focus on matters of litigation posture (who wins or loses if an argument is proved) we look to the type of analytical time travel being performed. Corrective entry defenses and actual potential competition theories involve exercises in forward time travel: reasoning about how future entry will impact future competition. Preventative entry defenses and perceived potential competition theories involve exercises in backward time travel: reasoning about how threats of future entry impact current competition. Grouping theories in this way reveals analytical flaws and unprincipled asymmetries in current thinking. It also exposes problems and paradoxes that beset all time travel arguments in antitrust analysis.
... In some circles, this is now the conventional wisdom, the starting point for policy analysis rather than a bold hypothesis that needs to be tested. 15 This report tests that hypothesis with Census Bureau data. ...
Alarmists say the economy is experiencing a crisis of market concentration, with dominant
players stifling competition in industry after industry. That is the pretext for a push to radically restructure antitrust policy—but newly released Census data largely contradict the claim.
This study examined the effects of competition (antitrust) law on consumer welfare in Zambia, with a focus on market practices, pricing, and consumer protection. Aimed at promoting fair competition, competition law seeks to benefit consumers through lower prices, improved quality, innovation, and diverse choices. The research, organized around four key objectives, revealed mixed outcomes in Zambia. High market concentration often led to elevated prices and limited choices, reducing consumer welfare. While Zambia's regulatory framework aims to curb anti-competitive practices, resource constraints hinder enforcement, allowing such practices to persist. Merger controls generally preserved market competition, yet inconsistent application weakened these gains. Consumer awareness emerged as a significant factor, with informed consumers enhancing regulatory effectiveness. The findings emphasized the need for robust enforcement, an improved legal framework, and increased consumer education to maximize the benefits of competition law, better protect consumer interests, and foster competitive markets in Zambia.
The Digital Markets Act (DMA) is aimed at setting out harmonised rules to ensure contestable and fair markets in the digital arena across the Union. The regulatory instrument is, thus, divided into two major objectives: ensuring that the impending fragmentation of the regulation of digital markets does not reproduce any further across the Member States as well as the pursuit of the ethereal concepts of contestability and fairness. Under the regulatory and economic lenses, contestability and fairness are not workable concepts to be incorporated directly by the European Commission in its enforcement of the DMA. As a response to that, the chapter proposes a set of metrics, considering different perspectives born into these concepts, to guide the Commission’s application of the regulatory framework and the Court of Justice’s futureproofing of its effectiveness. Within this same spirit, the chapter refers contestability and fairness back to the DMA’s broader legitimacy through the concepts of multi-level governance and the enhancement of trust between the intervening agents of the regulation.
Competition policy has been a central forum for contesting the uneasy relationship between capitalism and democracy since the late nineteenth century. From the earliest policy debates, concerns that robust competition policies aimed at limiting economic concentration would disadvantage domestic producers featured prominently. This dynamic creates an international cooperation problem over competition policy that has intensified with the dramatic increases in globalization over the last several decades. Understanding the causes and consequences of this cooperation problem is central to understanding global governance of the world economy, including the ability of democratic states to manage global capitalism in a manner that sustains democracy. This essay frames the challenge that global competition policy has posed over the last hundred years and argues that democratic major powers have played a critical role in shaping the limited cooperation that has been achieved. A research agenda that develops integrated theories of domestic and international competition policymaking as well as a multi-method empirical agenda for describing and explaining policy outcomes and their consequences for economic inequality, growth, and democracy is an essential task for international relations scholars.
In 2005, the European Commission advocated for a more economic approach to enforcing competition laws. The sole criterion for assessing the lawfulness of a market practice should be the appraisal of its net effect on consumer welfare. The Court of Justice was reluctant to adopt such an approach until its 2017 Intel Judgment. Its endorsement—which is debatable insofar as the judgment may give rise to different interpretations—may appear paradoxical in that it is concomitant with a sharp challenge to the consumer welfare criterion in the United States. The purpose of this article is to retrace the history of this criterion, particularly its adoption in the context of EU competition law. We aim to show that the criticisms of the effects-based approach can be addressed not by moving away from the consumer welfare criterion but by integrating it into a broader perspective that also takes into account the protection of the competition process itself.
Research on firm-level corporate political activity often treats firm-government interactions as independent of the market competition between firms. Yet, firms that compete in the market will consider rivals when making strategic nonmarket decisions. Ignoring market rivalry when studying nonmarket strategy introduces fundamental endogeneity problems and potentially overlooks a central mechanism explaining firms’ political choices. Our study demonstrates this by investigating the strategic nonmarket interactions of large US tobacco manufacturers, a case study that is independently interesting. From 1992 to 2008, the US tobacco industry experienced dramatic upheaval in its business environment as regulatory authority shifted from the state to federal level, under the Food and Drug Administration. Using firm-candidate–cycle data, a complete information campaign contributions game, played in the nonmarket environment, is estimated for two of the United States’ largest tobacco manufacturers. Results demonstrate that, rather than acting in isolation, US tobacco firms strategically coordinated their firm-level political campaign contributions.
Purpose
The purpose of this paper is to analyze variations in the degree of persistence of profitability across diverse economic sectors and industry groups over the time period of 1990-2014 for a sample of top publically listed firms belonging to a selected set of developed and developing economies.
Design/methodology/approach
Degree of profit persistence has been estimated using Mueller’s (1990) autoregressive methodology. Firms were classified into different economic sectors and industry groups as per the Global Industry Classification Standard (GICS). The examination of inter-sectoral variations in profit persistence has been performed by comparing mean values of estimated short-run and long-run profit persistence parameter for all firms and between firms belonging to the developed and developing countries, respectively.
Findings
Firms in consumer staples, consumer discretionary and health care enjoy persistent above the norm returns, unlike firms in traditional industries, utilities and energy sectors, which are characterized by low persistence and below the norm returns. A high degree of profit persistence is observed in health care and idea- and technology-intensive sector in the developed countries; however, in the developing countries, profits persist higher in consumer discretionary and capital-intensive telecommunication services sectors.
Originality/value
The study provides a holistic examination of inter-sectoral variations in profit persistence of top firms in developed and developing economies using a uniform methodology and data set. It can serve as an aid to the competition commissions and anti-trust regulatory authorities to formulate policies for curtailing anti-competitive activities in certain sectors.
Resumo: Este artigo busca identificar os motivos por trás do debate sobre o alinhamento entre proteção de dados pessoais e defesa da concorrência. O tema tem recebido maior atenção nos últimos anos, com a promulgação de legislação específica sobre dados pessoais e pela maior atuação das autoridades de defesa da concorrência no âmbito de plataformas digitais. Na primeira parte do artigo, analisam-se as diferenças entre os dois campos de pesquisa e seus elementos estruturais. Na segunda parte, identificam-se duas vertentes de potencial atuação do direito concorrencial no âmbito da proteção de dados, voltadas à atuação do CADE. A terceira parte conclui com incitações de uma agenda de pesquisa.
Abstract: This piece intends to identify the reasons behind the debate about the substantive alignment between personal data protection and antitrust. The theme has received greater attention in the past few years, due to recent legislation regarding personal data and the greater action of competition authorities on digital platforms. The first section of the paper analyses the differences between the two research fields and its structural elements. The second section explores two possible aspects of the CADE's practice on the intersection between data protection and competition law. The third section concludes with a mapping of a research agenda.
Cet article traite de l’appréhension par l’économie du droit de la concurrence de la question des pouvoirs économiques privés. Nous mettons en évidence une tension entre les recommandations qui découlent d’une défense de l’ordre concurrentiel, conçu comme une garantie d’accès au marché et de pluralisme, et celles qui assignent à ce dernier le seul et unique objectif de la maximisation du bien-être du consommateur. Nous illustrons notre propos par une analyse de ces enjeux pour les marchés numériques. Codes JEL: B25, D43, K21
This article considers the consequences of the Chicago School’s theoretical shift in the early 1950s on the issues of the concentration of private economic power and the linking of the economic and political spheres. It analyzes the process by which the first school, embodied by Henry Simons and Frank Knight, which accepted government intervention and placed emphasis on the deliberative nature of the democratic system, was progressively supplanted by a new approach rejecting any intervention in the market process and promoting a strict separation between the economic and political spheres. We focus on the dynamic through which this new conception of liberalism tends to consider the democratic process as a threat to economic liberties.
In this paper, we discuss whether the consumer welfare (CW) standard needs to be replaced or revised in order for antitrust law to deal effectively with the economic challenges of the platform economy. We argue that both the general and platform-specific assaults on the CW standard are misguided, that the CW standard is capable of addressing the economic concerns that critics have raised, and that the proposed alternatives would make things worse—not better.
The recent fall of labor's share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a "superstar firm" model where industries are increasingly characterized by "winner take most" competition, leading a small number of highly profitable (and low labor share) firms to command growing market share. Building on Autor et al. (2017), we evaluate and confirm two core claims of the superstar firm hypothesis: the concentration of sales among firms within industries has risen across much of the private sector; and industries with larger increases in concentration exhibit a larger decline in labor's share.
In this paper we propose a method to evaluate the effectiveness of U.S. horizontal merger policy and apply it to the study of five recently consummated consumer products mergers. We select the mergers from those that, from the public record, seem most likely to be problematic. Thus, we estimate an upper bound on the likely price effect of completed mergers. Our study employs retail scanner data and uses familiar panel data program evaluation procedures to measure price changes. Our results indicate that four of the five mergers resulted in some increases in consumer prices, while the fifth merger had little effect.
This chapter, which offers a synthetic assessment of how the lessons of the economics of innovation inform merger analysis, contrasts two dominant perspectives that inform merger analysis: Arrow versus Schumpeter. Where the Arrow approach suggests the positive impact of product market competition on innovation, the Schumpeter perspective focuses instead on the innovation inducements due to scale, and looks upon the prospects of market power. Innovation is enhanced when (1) firms have the prospect of either gaining or protecting sales by providing additional value to consumers (the Contestability Principle), (2) the level of intellectual property protection is higher (the Appropriability Principle), and (3) complementary assets can be combined to enhance innovative capabilities (the Synergy Principle). Illustrating the role of these principles in clarifying the innovation impact of mergers in particular cases and circumstances, careful economic analysis helps to clarify policy analysis and how long-standing conceptual frameworks can be enriched by careful, formal reconsideration.
A comprehensive analysis of merger outcomes based on all empirical studies, with an assessment of the effectiveness of antitrust policy toward mergers.
In recent decades, antitrust investigations and cases targeting mergers—including those involving Google, Ticketmaster, and much of the domestic airline industry—have reshaped industries and changed business practices profoundly. And yet there has been a relative dearth of detailed evaluations of the effects of mergers and the effectiveness of merger policy. In this book, John Kwoka, a noted authority on industrial organization, examines all reliable empirical studies of the effect of specific mergers and develops entirely new information about the policies and remedies of antitrust agencies regarding these mergers. Combined with data on outcomes, this policy information enables analysis of, and creates new insights into, mergers, merger policies, and the effectiveness of remedies in preventing anticompetitive outcomes.
After an overview of mergers, merger policy, and a common approach to merger analysis, Kwoka offers a detailed analysis of the studied mergers, relevant policies, and chosen remedies. Kwoka finds, first and foremost, that most of the studied mergers resulted in competitive harm, usually in the form of higher product prices but also with respect to various non-price outcomes. Other important findings include the fact that joint ventures and code sharing arrangements do not result in such harm and that policies intended to remedy mergers—especially conduct remedies—are not generally effective in restraining price increases. The book's uniquely comprehensive analysis advances our understanding of merger decisions and policies, suggests policy improvements for competition agencies and remedies, and points the way to future research.
Since the Supreme Court’s landmark 1963 decision in United States v. Philadelphia National Bank, antitrust challengers have mounted prima facie cases against horizontal mergers that rest on the level and increase in market concentration caused by the merger. Proponents of the merger are then permitted to rebut by providing evidence that the merger will not have the feared anticompetitive effects. Although the means of measuring that concentration as well as the triggering levels have changed over the last half century, this basic approach has remained intact. This longstanding structural presumption has been critical to effective merger enforcement. In this Feature, we argue that the structural presumption is strongly supported by economic theory and evidence and suggest some ways to further strengthen it. We also respond to those who would weaken or eliminate it. Our analysis applies to the modern legal landscape, where the promotion of competition and the protection of consumer welfare are cons idered the purpose of merger enforcement. We also consider a promising recent legislative proposal that aims to strengthen and expand the structural presumption. In particular, we suggest that the proposal can be improved so as to strengthen merger enforcement, primarily by facilitating the government’s establishment of its prima facie case, while staying true to the fundamental goal of antitrust to promote competition.
A large literature documents declining measures of business dynamism including high-growth young firm activity and job reallocation. A distinct literature describes a slowdown in the pace of aggregate labor productivity growth. We relate these patterns by studying changes in productivity growth from the late 1990s to the mid 2000s using firm-level data. We find that diminished allocative efficiency gains can account for the productivity slowdown in a manner that interacts with the within-firm productivity growth distribution. The evidence suggests that the decline in dynamism is reason for concern and sheds light on debates about the causes of slowing productivity growth.
Nel corso degli ultimi anni, il tema della disuguaglianza economica ha assunto una particolare rilevanza, anche in ragione degli effetti prodotti dalla crisi economica. L'articolo esamina il modo in cui le preoccupazioni pubbliche circa la crescente disuguaglianza possono stimolare proposte di modifica dell'antitrust e della politica della concorrenza. Inoltre, esso delinea i canali attraverso i quali il potere di mercato contribuisce al divario economico, prospettando un ventaglio di possibili aggiustamenti della politica antitrust che potrebbero essere considerati quale risposta al potere di mercato e, piu in generale, al problema dalla disuguaglianza.
John Kwoka’s recently published Mergers, Merger Control, and Remedies (2015) has received considerable attention from both antitrust practitioners and academics. The book features a meta-analysis of retrospective studies of consummated mergers, joint ventures, and other horizontal arrangements. Based on summary statistics derived from these studies, Kwoka concludes that domestic antitrust agencies are excessively tolerant in their merger enforcement; that merger remedies are ineffective at mitigating market power; and that merger enforcement has become increasingly lax over time. We review both his evidence and his empirical methods, and conclude that serious deficiencies in both undermine the basis for these conclusions.
A growing body of evidence indicates that the U.S. economy has become less dynamic in recent years. This trend is evident in declining rates of gross job and worker flows as well as declining rates of entrepreneurship and young firm activity, and the trend is pervasive across industries, regions, and firm size classes. We describe the evidence on these changes in the U.S. economy by reviewing existing research. We then describe new empirical facts about the relationship between establishment-level productivity and employment growth, framing our results in terms of canonical models of firm dynamics and suggesting empirically testable potential explanations.
Robert Bork thought that antitrust restrictions on horizontal mergers should be confined to already highly concentrated markets. Actual policy, which had been much more restrictive, adopted Bork’s recommendation in the early 1980s. This paper examines the connection between this policy shift and concentration in the manufacturing sector. I find that concentration, which had been unchanged on average for all of the 20th century, began rising at the same time that merger policy changed. Concentration has increased steadily over the entire post-Bork period. The increase has been especially pronounced in consumer goods industries, which were already becoming more concentrated in the pre-Bork era. I find little difference in the underlying trends between already highly concentrated industries and the rest of manufacturing. Neither slowing growth in domestic manufacturing nor growing imports seem sufficient to explain the increased concentration.
This chapter discusses inter-industry studies of the relations among various measures of market structure, conduct, and performance. It discusses that tradition has indeed uncovered many stable, robust, and empirical regularities. Inter-industry research has taught much about the way markets look, especially within the manufacturing sector in developed economies, even if it has not shown exactly the way markets work. Work in some areas has produced no clear picture of the important patterns in the data, and non-manufacturing industries have not received attention commensurate with their importance. But cross-section studies are limited by serious problems of interpretation and measurement. Future inter-industry research should adopt a modest, descriptive orientation and aim to complement case studies by uncovering robust empirical regularities that can be used to evaluate and develop theoretical tools. Much of the most persuasive recent work relies on nonstandard data sources, particularly panel data that can be used to deal with disequilibrium problems and industry-specific data, which mitigate the problem of unobservable industry-specific variables.
Why is U.S. Productivity Growth So Slow? Possible Explanations and Policy Responses
- Martin Baily
- Bruce Blonigen
Whither Antitrust Enforcement in the Trump Administration
- Steven Salop
- David Autor
Market Power in the U.S. Economy Today
- Jonathan Baker