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Your Weekly Digest | Issue 246

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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Google Looks to Topple $5B EU Antitrust Fine | PYMNTS.com

Google on Monday (Sept. 27) launched its appeal to rescind the $5 billion antitrust fine levied by the European Union, according to a Wall Street Journal report.

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Lina Khan’s big tech crackdown is drawing blowback. It may succeed anyway. | POLITICO
The antitrust crusader’s push to shake the FTC out of its “timidity” is alarming tech giants, Republicans and even some of the agency’s own. 
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ACCC slams Google for creating 'systemic competition concerns' in ad tech space | ZDNet

Google has been accused of fuelling systemic transparency issues in the ad tech space due to not providing the total fees and charges to advertisers and publishers.

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It comes as the Petrol Retailers Association warns that up to two-thirds of its members are out of fuel. Read more.
The Bundeskartellamt has prohibited a company of Funke Mediengruppe from acquiring the sole control of the publishing companies of the daily newspaper “Ostthüringer Zeitung”. Funke publishes the “Thüringische Landeszeitung”, whose circulation area to some extent overlaps that of the “Ostthüringer Zeitung”. With the merger which has now been prohibited, the “Ostthüringer Zeitung” and “Thüringische Landeszeitung” would have been brought together under the sole control of Funke Mediengruppe. Read more.
In recent months, I have been asked whether the Antitrust Division will chart a balanced course at the intersection of antitrust and intellectual property. The answer is yes. Our analysis of intellectual property aims to appropriately reflect the competing policy considerations, the realities of innovation in the modern economy, and the law. It also generally aligns with the views of the Federal Trade Commission, and we have been working intensely to ensure collaboration and communications between the intellectual-property experts on the staff of each agency. Understanding the importance of transparency to the business community and the bar, I would like to begin to preview today some of the Antitrust Division’s current positions in this area. Read more. 
 In today's edition of The Counterbalance we meet one of the busiest actors in this terrain, Ioannis Lianos, a prolific academic who co-founded the Inclusive Competition Forum with our Michelle Meagher, and is now head of the Hellenic Competition Commission.  In November 2019, two months after taking up his position, his office mounted dawn raids against Greece's biggest banks.  And those were just the start. In this interview with the Balanced Economy Project’s Nicholas Shaxson, he talks about taking on vested interests, and new ways of thinking about economic power. Read more.
The 2020 Vertical Merger Guidelines were not some ideal economic document that the FTC disregarded; rather, they failed and were retracted. Read more.
Federal Trade Commission (FTC) Chair Lina Khan’s Sept. 22 memorandum to FTC commissioners and staff—entitled “Vision and Priorities for the FTC” (VP Memo)—offers valuable insights into the chair’s strategy and policy agenda for the commission. Unfortunately, it lacks an appreciation for the limits of antitrust and consumer-protection law; it also would have benefited from greater […] Read more.
The list of antitrust cases against Amazon, Apple, Facebook, and Google is getting quite long. Read more.
Few cases are as exciting and potentially as consequential as Android. The hearing before the General Court is now well under way. For us outside observers, Lewis Crofts‘ quasi-live tweeting is tru… Read more.
Christopher Cook, Sven Frisch, Vladimir Novak
The year 2020 marked the 30th anniversary of the EU Merger Regulation.1 Over the years, the Commission has received notifications for more than 8,000 transactions, of which it has prohibited less than 1 per cent (including Phase II withdrawals).2 This is at least partly attributable to the Commission’s enduring willingness to clear a substantially higher share of transactions (approximately 6 per cent)3 subject to remedies designed to preserve competition.
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Herbert Hovenkamp
Antitrust litigation often requires courts to consider challenges to vertical “control.” How does a firm injure competition by limiting the behavior of vertically related firms? Competitive injury includes harm to consumers, labor, or other suppliers from reduced output and higher margins.
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Mark A. Israel and Daniel P. O'Brien
We extend the theory of bilateral vertical contracting to a double moral hazard setting where upstream and downstream firms make complementary investments that enhance demand, downstream firms make fixed investments to enter the downstream market, and contracts are private information and determined through simultaneous bilateral bargaining. We show that vertical mergers mitigate bilateral contracting externalities and hold-up, which leads to an increase in complementary investments. If downstream products are either sufficiently distant or sufficiently close substitutes, a vertical merger benefits the merging firm, consumers, and the unintegrated downstream firm. For intermediate degrees of product differentiation, a case with linear demand and quadratic investment costs shows that consumers benefit if the marginal cost of investment is sufficiently low as revealed, for example, by a high ratio of R&D investments to sales. We apply the model to a vertical merger in the computer industry.  Read more.
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Kind regards, Valur Þráinsson, Founder of CompetitionFeed.com. Email: valur@competitionfeed.com
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