Items tagged with antitrust:
News & Updates:
Trust Busting in Silicon Valley: Analyzing the Role of Antitrust Regulation in the Technology IndustryFrom checking the weather to reading the news, from interacting on social media to shopping for gifts, it is evident that technology plays an integral role in our daily lives. We can attribute the products that we use every day with just a few prominent technology companies. “Tech giants” or even the “Frightful Five,” the collective names given to Amazon, Apple, Facebook, Microsoft, and Google (and by extension, its parent company Alphabet) underscore the idea that these technology companies significantly influence both our daily routines and the political and economic changes in our nation at large .
The Justice Department is suing to block AT&T’s proposed deal for Time Warner Inc., saying the deal could lead to higher costs and less choice for U.S. consumers.
Comcast was prevented from engaging in some of that same behavior when the Philadelphia cable giant bought NBCUniversal in 2011. But those restrictions on Comcast are set to expire in 2018.
“It’s pretty clear that the Justice Department is taking a different approach to AT&T/Time Warner than it did with Comcast/NBCU,” said Faculty Affiliate Kevin Werbach.
“The tide has turned in antitrust with [the Justice Department] being more skeptical of media and technology deals,” he said. Werbach said it was “entirely possible” that a Hillary Clinton administration also would have blocked an AT&T/Time Warner deal.
Divestiture. It is a word anyone who follows mega-mergers and antitrust law hears on almost a daily basis. The first time that I thought about it was in a course I took, “Economic Analysis of Law” and the idea did not make too much sense. When companies merge aren’t they planning on creating some sort of new efficiency by becoming a larger company? Wouldn’t they be giving up any economies of scale by unloading a sizable chunk of their companies? That’s why when I stumbled across a New York Times article with some anecdotal evidence that supported my skepticism [Sagers, “Limits of Divestiture”], I wanted to delve deeper into the issue. During my summer at the FTC, I have been involved on a case that analyzed a divestiture remedy and I have been able to read some FTC resources to better verse myself on the subject.
With a flurry of new health insurance consolidations, Congress is reviewing these acquisitions as monopolies with negative effects for consumers. Though insurers claim economies of scale, research from Faculty Affiliates Robert J. Town and Amanda Starc find that “monopoly” insurance markets result in higher overall pricing for consumers—upward of 30 percent compared with a competitive landscape.
So, should we protect insurance mergers or subject them to the same anti-trust regulations as other companies?
Mobile application developers claim that Google discourages competition and gives unfair priority to its own applications like mail and search features on Android devices. Critics believe that Google is taking advantage of its leading market position to bundle products into the Android software, which is available to device manufacturers for free as long as they agree to this bundling. Faculty Affiliate Professor Christopher Yoo comments on the situation: “What we have to remember is that Android is an open-source platform and that means anyone who is unhappy with the terms to access the Android platform can develop their own version as many Chinese manufacturers have done.”