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Weekly Digest | Issue 14

Valur Thrainsson
3 min read

Good morning,

We hope you are enjoying CompetitionFeed.

Here below you find the most read articles on CompetitionFeed over the last week.


AT&T unclear what final merger conditions Justice Department will seek

AT&T Inc was confident it would win regulatory approval for its $85.4 billion acquisition of Time Warner Inc (TWX.N) before year's end as the Justice Department continues its review, but was still awaiting details about any final requirements for the deal, a senior executive said. Bob Quinn, AT&T's (T.N) senior executive vice president for external and legislative affairs, said in a C-SPAN interview this week that the telecommunications company was unclear what final conditions the Justice Department may seek as part of any approval. "That conversation is just beginning really," Read More.

Sky News

Competition body to end long wait for new CEO

The year-long search for a new boss of the UK's competition regulator is close to concluding with a decision to appoint its acting chief to the role on a permanent basis. Sky News has learnt from sources in Whitehall that Greg Clark, the Business Secretary, has been told that Andrea Coscelli has emerged as a selection panel's preferred candidate to run the Competition and Markets Authority (CMA). Read More.


Amazon Has Patented A Tool To Block The Kind Of Price Comparisons That Grew Its Empire

After making front-page news with its plans to scoop up Whole Foods for a cold-pressed $13.7 billion, Amazon has again caught the tech industry's eye with a new patent aimed to keep in-store shoppers from straying online. The Washington Post reported yesterday that Amazon has recently been awarded a patent which could keep customers in its new retail locations from comparing online prices for products while there--something which, in the past several years, would traditionally be done on Amazon itself. Known as 'mobile window shopping,' the practice has allowed many consumers to get a real-life feel for products in retail locations before ordering them online for less, and has helped cause a "worrisome decline" for brick-and-mortar businesses, according to the Post. Read More.


Critics say Whole Foods deal would give Amazon an unfair advantage

While antitrust experts expect Inc's (AMZN.O) bid for Whole Foods Market Inc (WFM.O) to win regulatory approval, some critics argue the deal should be blocked because it gives the online retailer a nearly unstoppable head start toward domination of online grocery delivery. They argue the Whole Foods acquisition will give Amazon an unfair advantage over traditional grocers and new players that might emerge in the market, potentially grounds for the deal to be blocked for antitrust reasons. Read More.

Economics Letter

A simple model of mergers and innovation

  • We consider a merger in a setting where firms innovate to discover new products.
  • We discuss two fundamental effects: externalities of innovation and product market competition.
  • The merging parties always decrease their innovation efforts, contrary to the outsiders.
  • A merger tends to reduce overall innovation and consumers are always worse off after a merger.
  • The inverted-U relationship between innovation and some measure of competition is not applicable to a merger setting. Read More.

Tinbergen Institute Discussion Paper

R&D Cooperatives and Market Collusion: A Global Dynamic Approach

We present a continuous-time generalization of the seminal R&D model of d'Aspremont and Jacquemin (The American Economic Review 78(5): 1133–1137, 1988) to examine the trade-off between the benefits of allowing firms to cooperate in R&D and the corresponding increased potential for product market collusion. We consider all trajectories that are candidates for an optimal solution as well as initial marginal cost levels that exceed the choke price. Firms that collude develop further a wider range of initial technologies, pursue innovations more quickly, and are less likely to abandon a technology. Product market collusion could thus yield higher total surplus. Read More.

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Best wishes, CompetitionFeed Team

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