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Your Weekly Digest | Issue 255

Valur Thrainsson
8 min read

Welcome to CompetitionFeed, a weekly newsletter with the most recent and relevant competition and anti-trust news, blogs and journal publications. Never miss an update. If you’d like to receive issues over email, you can sign-up here.

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Good morning.

Last week we sifted through 5.000+ articles from 100+ publishers to help you stay updated!

Below are the pieces that I have handpicked and find the most recent and relevant competition and anti-trust news, blogs, and journal publications.

Enjoy!

Kind regards, Valur
News
The European Commission slapped an overall fine of €344 million on five big banks for taking part in a foreign-exchange trading cartel. The decision involves some of Europe’s biggest banks: Switzerland’s Credit Suisse and UBS, and U.K.-based RBS, HSBC and Barclays. The Commission found that some traders at these banks exchanged sensitive information and trading plans in a chatroom called “Sterling Lads.” In some cases, they even coordinated trading strategies. The traders were in charge of the foreign-exchange spot trading of G10 currencies. Read more.
In ordering Facebook to sell Giphy, the CMA has gone further than any other competition regulator in the world. For all the outrage directed at Big Tech over the past decade, regulators have shied away from the nuclear option of actually breaking up a major platform. Until this week, that is. By ordering Facebook to part with Giphy, a GIF creation platform it acquired in 2020, the U.K.’s Competition and Markets Authority broke a global taboo and ushered in a brave new world of tech enforcement. Read more.
Meta Platforms Inc's Facebook asked a U.S. court on Wednesday to dismiss and not allow the refiling of an antitrust lawsuit by the U.S. Federal Trade Commission which urges a court to demand that the company sell two big subsidiaries. Read more.
Agencies
The Federal Trade Commission today sued to block U.S. chip supplier Nvidia Corp.’s $40 billion acquisition of U.K. chip design provider Arm Ltd. Semiconductor chips power the computers and technologies that are essential to our modern economy and society. The proposed vertical deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips. The FTC’s complaint alleges that the combined firm would have the means and incentive to stifle innovative next-generation technologies, including those used to run datacenters and driver-assistance systems in cars. Read more.
Leadership of the Federal Trade Commission and the Antitrust Division of the Department of Justice attended meetings in London this week as part of the Competition Enforcers Summit, which took place under the 2021 G7 Digital and Technology Track in connection with the UK’s G7 presidency. Read more.
The Department of Justice Antitrust Division and the Federal Trade Commission (FTC) announced an agenda for their upcoming virtual workshop regarding competition in labor markets. Read more.
The Bundeskartellamt has cleared the formation of the joint venture REKS GmbH & Co. KG by Kali und Salz Minerals and Agriculture GmbH and REMEX GmbH, a member of the Remondis Group (Rethmann Group). In the future the joint venture REKS will distribute hazardous waste for underground disposal and backfilling at Kali und Salz’s mining sites. In order to dispel competition concerns expressed by the Bundeskartellamt, the companies first implemented extensive offsetting measures. Read more.
The Bundeskartellamt has imposed a fine totalling around 7 million euros on Bose GmbH, which is based in Friedrichsdorf, on account of resale price maintenance. Bose manufactures and distributes high-end consumer electronics. The company’s activities in this area mainly focus on the distribution of audio products, especially speakers and headphones. The proceeding was initiated within the context of a request for official assistance by the Austrian competition authority and a dawn raid conducted in March 2018. Read more.
Blogs
Facebook’s approach to users’ data has just been dealt a major blow from the European court of justice (ECJ). In an answer to a question from Germany’s highest court, the ECJ’s advocate general – whose opinion is not binding but is generally followed by the court – has made an essential clarification to Europe’s data protection law to confirm that consumer associations can bring actions on behalf of individuals. Read more.
On both sides of the Atlantic, 2021 has seen legislative and regulatory proposals to mandate that various digital services be made interoperable with others. Several bills to do so have been proposed in Congress; the EU’s proposed Digital Markets Act would mandate interoperability in certain contexts for “gatekeeper” platforms; and the UK’s competition regulator will... Read more.
Interim measures are back on the Swiss Competition Commission’s radar, especially in dominance cases. The background of this latest development is the authority’s desire to accelerate its proceedings and ensure the efficacy of competition law. However, the most recent cases show that interim measures are not always suitable for this purpose – especially in dynamic...  Read more.
Top economic advisers to President Joe Biden say that the administration’s antitrust agenda seeks to rebuild the economy with a focus on local, small-business growth and higher worker wages while tackling major issues of the current economy, specifically inflation and supply chain backups. Read more.
Articles
  • We characterize the equilibrium of the linear specification of duopoly platform competition with singlehoming on both sides when platforms are asymmetric.
  • On both sides, we allow for differences in marginal costs, stand-alone benefits, and per-user cross-group network effects across firms.
  • We identify market environments in which one platform obtains a larger market share on both sides but lower overall profit than the other platform.
  • In such situations, the larger firm charges a higher price-cost margin either on one or on both sides.
Jorge Padilla, Paul Reynolds, Joe Perkins
A new report by three Compass Lexecon experts assesses how governments and regulators can facilitate the investment required to achieve widespread and timely 5G deployment in European mobile markets. Read more.
Jens-Uwe Franck and Martin Peitz
In this article we present and critically evaluate the newly introduced section 19a of the German Competition Act. The provision applies to operators of two-sided platforms and networks that the Bundeskartellamt classifies as being of ‘paramount significance for competition across markets’. Using examples of previous abuse cases, we discuss which firms may eventually be the addressees of the new instrument. We analyse the list of prohibitable practices and point to normative uncertainties as regards the assessment of platform activities. We discuss the merits of the abridged judicial review. Finally, we consider the pro-spect of continuing fragmentation in the legal treatment of digital platforms in the internal market and assess the interaction with the Digital Markets Act as proposed by the European Commission. Read more.
George Alan Hay and E. Jane Murdoch
Parallel conduct by competing firms can be the result of completely independent and uncontroversial behaviour, such as when all suppliers are affected by and respond unilaterally to the same increase in costs. At the other extreme, parallel conduct can be the result of interdependent and deliberately coordinated behaviour, such as when all suppliers meet in the proverbial smoke-filled room and agree to fix prices. But as economists have been telling us for decades, there is a vast middle ground, where the parallel conduct stems from some degree of interdependence and some behaviour short of the hard-core cartel described above.
Read more.
Jeong Yeol Kim and Charles Noussair
Cartels are often fought by granting leniency, in the form of forgiveness of penalties, to whistle-blowers. This study employs a laboratory experiment to compare leniency programs that differ with respect to fine size and whether a second whistle-blower may apply for leniency. The results show that leniency does not affect the probability that a cartel forms, but is effective in exposing cartels and thereby inhibiting cartel success. Higher fines are more effective, but allowing leniency to a second whistle-blower is no more effective than granting leniency to only one whistle-blower. Read more.
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Kind regards, Valur Þráinsson, Founder of CompetitionFeed.com. Email: valur@competitionfeed.com
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