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Your Weekly Digest | Issue 226

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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Mastercard fined £31m for breaching competition law | BBC News
Five payments firms are accused of running a cartel to reduce competition in the market for pre-paid cards.
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Facebook Inc. will face an in-depth U.K. review of its $400 million purchase of GIF search engine Giphy Inc. after it skipped offering concessions to address antitrust concerns. Read more.
Following the Federal Trade Commission’s decision not to petition the Supreme Court for review of the Qualcomm case, Acting Chairwoman Rebecca Kelly Slaughter issued this statement:“Given the significant headwinds facing the Commission in this matter, the FTC will not petition the Supreme Court to review the decision of the Court of Appeals for the Ninth Circuit in FTC v. ... Read more.
A federal grand jury in Las Vegas, Nevada, returned an indictment today charging VDA OC LLC (formerly Advantage On Call LLC), a health care staffing company, and Ryan Hee, a former manager of the company, with entering into and engaging in a conspiracy with a competitor to allocate employee nurses and to fix the wages of those nurses, in violation of the Sherman Act. Read more.
The European Commission has released new guidance for European contracting authorities on how to use EU law to address suspected cases of collusion in public procurement. It is also providing further detail on tools announced in 2017 to help EU countries better deter, detect and address collusion. Read more.
On March 26, the EU Commission announced a major reform of EU Merger Regulation (EUMR) procedures, arguably the most significant since the 2004 adoption of the current EUMR.  The current EUMR expanded EU jurisdiction by broadening the EUMR standard of review and allowing parties to request that transactions notifiable in three or more Member States... Read more.
Slovak Telekom was eagerly awaited, to a significant extent, because of its impact on Google Shopping, currently pending before the General Court. The question of whether the legality of the behavi… Read more.
Once in motion, the refeudalization of society through the entanglement of private and state power is very difficult to reverse. Read more.
Jonathan B. Baker and Joseph Farrell
When the 1968 Merger Guidelines were drafted, both the economics and antitrust literatures addressed how competition could be softened when oligopolists anticipated the natural and predictable responses of their rivals to their competitive moves, such as price cuts or output expansion. But when economists developed new models of oligopoly behavior, and of coordinated effects in particular, the older ideas were dropped—until the 2010 Guidelines, when the older ideas were reincorporated along with the newer ones. Our article points out limitations of the workhorse repeated game model of oligopoly conduct for analyzing coordinated effects of mergers, and suggests ways to make that model more realistic. We also identify important research questions that are raised when attempting to account for oligopolists’ natural and predictable responses in evaluating the consequences of mergers, and suggest studying Stackelberg reactions as a way to make progress in doing so.
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In the battle of ideas, it is quite useful to be able to brandish clear and concise debating points in support of a proposition, backed by solid analysis. Toward that end, in a recent primer about antitrust law published by the Mercatus Center, I advance four reasons to reject neo-Brandeisian critiques of the consensus (at least, until very recently) consumer welfare-centric approach to antitrust enforcement. My four points, drawn from the primer (with citations deleted and hyperlinks added) are as follows:... Read more.
Cabral, L., Haucap, J., Parker, G., Petropoulos, G., Valletti, T., and Van Alstyne, M
Over the last years, several reports highlighted the market power of very large online platforms that are gatekeeping intermediaries between businesses and consumers, and the difficulty for classic competition policy tools to deal effectively with anti-competitive practices in these platforms. In response to this, the European Commission recently published a proposal for a Digital Markets Act (DMA) to complement existing competition policy tools by means of ex-ante obligations for platforms. Read more.
Damien Geradin, Dimitrios Katsifis
The Apple App Store is the only channel through which app developers may distribute their apps on iOS. First launched in 2008, the App Store has evolved into a highly profitable marketplace, with overall consumer spend exceeding $50 billion in 2019. Read more.
Herbert Hovenkamp
How should plaintiffs show harm from antitrust violations? The inquiry naturally breaks into two issues: first, what is the nature of the harm? and second, what does proof of causation require? The best criterion for assessing harm is likely or reasonably anticipated output effects. Antitrust’s goal should be output as high as is consistent with sustainable competition. Read more.
Olivier Body, Alexis Walckiers
Economists often weigh the pros and cons of different alternatives, none of which is ideal (or first best in economic jargon). This paper discusses one of such choices: whether to define local markets by relying on catchment areas or by applying a hypothetical monopoly test. It argues that competition authorities should recognise more explicitly that this choice should be driven by the quality of the available data. Read more.
Cento Veljanovski
The European Court of Auditors’ (‘ECA’) report The Commission’s EU merger control and antitrust proceedings: A need to scale up market oversight published in late 2020 is its first audit of DG Competition’s (‘DG COMP’) enforcement activities. It found that the ‘commission made good use of its enforcement powers’ within its ‘limited budget’, but as the report’s subtitle suggests, ‘it needed to scale up its market oversight’. Read more.
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Kind regards, Valur Þráinsson, Founder of Email:
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