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Your Weekly Digest | Issue 245

Valur Thrainsson
5 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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As FTC Shifts Priorities Under Khan, Collusion Probe of Hyatt, Hilton Goes on Ice | The Information
As Federal Trade Commission antitrust lawyers try to police vast swaths of the economy with limited resources, they’re making trade-offs. The FTC earlier this year stepped up a long-running investigation into whether a group of major hotels including Hyatt, Hilton and Marriott hurt customers by ...
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Major record labels could face competition inquiry | BBC News
The competition watchdog has been asked whether major record labels are distorting the market.
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The U.S. Department of Justice, together with Attorneys General in six states and the District of Columbia, sued today in the District of Massachusetts to block an unprecedented series of agreements between American Airlines and JetBlue through which the two airlines will consolidate their operations in Boston and New York City. The civil antitrust complaint alleges that this extensive combination, which they call the “Northeast Alliance,” will not only eliminate important competition in these cities, but will also harm air travelers across the country by significantly diminishing JetBlue’s incentive to compete with American elsewhere, further consolidating an already highly concentrated industry.  Read more.
Letter to Santander UK plc about its breach of the Retail Banking Market Investigation Order 2017. Read more.
The Commission for Protection of Competition has instituted antitrust proceedings ex officio against companies Atlantic Grupa – Zagreb, Atlantic Brands – Beograd, and Strauss Adriatic – Šimanovci to investigate the existence of restrictive agreements referred to in Article 10 of the Law on Protection of Competition, which restrict competition on the coffee market in the Republic of Serbia, and has conducted dawn raids. Read more.
The FTC is committed to policing gasoline and diesel markets to protect the American public against illegal acts. Given high prices at the pump these days, the Bureau of Competition is redoubling its commitment to police unfair methods of competition in wholesale and retail gasoline and diesel sales. Read more.
On 10 September 2021, certain significant changes to Austria’s competition law entered into force, although some of the merger control related changes will apply only as of 1 January 2022: Merger control. The amendments include a revision of Austria’s revenue-based merger control threshold, the introduction of the significant lessening of competition test, and a broadening... Read more.
Using the Hypothetical Monopolist Test to Define the Relevant Market for Ad Tech | Truth on the Market
Policymakers’ recent focus on how Big Tech should be treated under antitrust law has been accompanied by claims that companies like Facebook and Google hold dominant positions in various “markets.” Notwithstanding the tendency to conflate whether a firm is large with whether it hold a dominant position, we must first answer the question most of...
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Carl Shapiro and Herbert Hovenkamp
The FTC’s withdrawal of its 2020 vertical merger guidelines is contrary to an extensive economic literature about vertical integration. Read more.
Tommaso Valletti
Puzzling piece by Hoverkamp and Shapiro on vertical mergers in 
The bigger picture is that we block virtually no merger involving large corporations, and especially so when it comes to vertical stuff. 1/ Read more.
William Kolasky
Drawing on extensive analysis of the FTC Act’s legislative record, a leading antitrust-law attorney and scholar debunks three FTC Commissioners’ justifications for eliminating a bipartisan guidance for how to pursue “unfair methods of competition” enforcement, and concludes that a drift away from first principles will stoke harmful uncertainty that chills competition. Read more.
Catarina M. P. Marvão
The existence and extent of recidivism have been highly debated in the last few years. This chapter examines the current theoretical, experimental and empirical literature on recidivism and related issues. It also presents novel evidence on: (i) the amount of recidivism in the EU between 1998 and December 2020 (up to 19% of cartel members, depending on how recidivism is defined); (ii) the trend of EU “leniency inflation” noticed by Marvão and Spagnolo (2018b), which is even steeper for multiple offending firms; and (iii) the ability of recidivists to use leniency programs strategically by rotating reports and using multi-market contact. Read more.
Macrobrewers initially responded to the rapid growth of the craft beer segment by product differentiation: offering versions of their own “craft beer.” When this proved unsuccessful, they began acquiring independent craft brewers. We examine the consequences of Anheuser-Busch InBev’s acquisition of Goose Island. We find large gains in sales for craft brewers post-acquisition, which suggests that marketing spillovers attracted new consumers to craft beer. We also find large negative effects on product variety, which suggests greater difficulty for craft brewers gaining shelf space in off-premise accounts. These variety effects are particularly pronounced in Goose Island’s regional “birthplace”: Illinois. Read more.
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