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Your Weekly Digest | Issue 231

Valur Thrainsson
6 min read

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Here below, you find the most recent and relevant competition and anti-trust news, blogs and journal publications over the last week.

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ACCC warns restricting access to technology is stifling right to repair agricultural machinery | ZDNet

The Australian competition watchdog wants agricultural machinery manufacturers to share information about software, tools, and parts with independent repairers.

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The European Commission has adopted a White Paper dealing with the distortive effects caused by foreign subsidies in the Single Market. The Commission now seeks views and input from all stakeholders on the options set out in the White Paper. The public consultation, which will be open until 23 September 2020, will help the Commission to prepare for appropriate legislative proposals in this area. Read more.
On May 5, 2021, the European Commission (the Commission) adopted a proposal for a regulation (the Anti-Subsidy Regulation) to combat distortions of competition in the European Union (EU) caused by subsidies granted by non-EU Member States to companies doing business in the EU.  The Anti-Subsidy Regulation is an important part of the von der Leyen... Read more.

The Federal Court has declared by consent that Tasmanian Ports Corporation Pty Ltd engaged in conduct that had the likely effect of substantially lessening competition in the markets for towage and pilotage services in northern Tasmania, in proceedings brought by the ACCC. Read more.
The Bundeskartellamt has discontinued its administrative proceeding on account of the planned merger of the purchasing cooperations VME Union GmbH and KHG GmbH & Co. KG (Krieger/Höffner group) after the companies had given up their plans. Read more.
A summary of ideas to address barriers to cooperation and measures to strengthen digital regulatory cooperation in future. Read more.
In my second post on matters related to the DMA Proposal (see for another post here), I would like to draw the readers’ attention to the role of the Court of Justice. I am not going to touch upon potential challenges of the DMA or questions of judicial review of acts taken by the Commission. Read more.
As readers will know, the Commission sent a Statement of Objections to Apple last week (for the press release, see here). The investigation focuses on the firm’s practices in relation to the … Read more.
The European Commission believes Apple is violating European competition laws and raising prices for consumers via its App Store. Read more.
John Gruber has a reasonably modest proposal.
Apple’s App Store is a marvel. Introduced in 2008, a year after the debut of the iPhone, it’s become a marketplace that generates billions of high-margin dollars for Apple every year.
But the App Store is also a problem for Apple. The company’s tight control over it — which is the only way iPhone customers can get apps onto their devices — has attracted sharp scrutiny, generating antitrust complaints and investigations, and now, a high-profile antitrust lawsuit from Epic Games, the company behind Fortnite. Read more.
Overgrowth developer Wolfire Games has shared more details about the reasons behind its lawsuit against Valve.
In a blog post published yesterday, founder and CEO David Rosen said he "felt [he] had no choice" as "gamers and game developers are being harmed by Valve's conduct." Read more.
In an interview with the Washington Monthly, the Minnesota Democrat vows to crack down on concentrated power. Read more.
RicardGil and Myongjin Kim
  • We study the effect of competition on quality in the US airline industry
  • We use a novel source of exogenous variation in competition, merger-induced entry.
  • More competition increases flight frequency and on-time performance.
  • We investigate entry deterrence behavior and competitive effects of entry.
Nathan Shekita
Common ownership exists when investors concurrently hold partial and significant shares in related firms. In this paper, I compile, document, and taxonomize 30 separate cases of intervention to demonstrate how common owners influence firm behavior. Although previous literature has identified a link between common ownership and product market outcomes, critics have questioned a common owner’s ability and incentive to alter the behavior of portfolio firms. Missing from the debate are observable interventions from common owners and the mechanisms through which common owners exercise their influence. This paper compiles relevant case studies from media coverage, regulatory proceedings, policy groups, and annual stewardship reports to uncover these channels. Read more.
Brendan Ballou
Federal courts have largely permitted “tacit collusion,” the process by which companies use public announcements, investments, and algorithms to raise prices or depress wages without ever coming to an explicit agreement with one another. This has an enormous impact on consumers, on workers, and on democracy as a whole. But barring an unexpected reinterpretation of the Sherman Act at the Supreme Court, those who hope to prevent tacit collusion must find new tools to do so. Read more.
Louis Kaplow
The flow of resources across sectors to their best use, with concomitant entry and exit, is central to the functioning and welfare properties of a market economy. Nevertheless, most industrial organization research, including applications to competition policy, undertakes partial equilibrium analysis in a single sector, often with a fixed number of firms. This article examines competition policy in a simple, multi-sector, general equilibrium model with free entry and exit. Even partial equilibrium analysis yields some lessons, such as that accounting for free entry often makes strengthening competition policy more rather than less attractive. When admitting flows between sectors, familiar prescriptions readily reverse. But such results may be partially offset or overturned yet again when incorporating free entry and exit in nontargeted sectors. Finally, the analysis of efficiencies also changes qualitatively with free entry because even fixed costs are fully borne by consumers in equilibrium. Read more.
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Kind regards, Valur Þráinsson, Founder of CompetitionFeed.com. Email: valur@competitionfeed.com
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