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Alden Abbott



Articles by Alden Abbott

In Consumer Welfare We Trust | Competition Corner

29 days ago

The consumer welfare standard (CWS) has been a staple in antitrust analysis for the better part of 40 years, surviving relatively unharmed through both Democratic and Republican administrations over its lifetime. A shift has occurred in the past few years, and when reflecting on the ABA Antitrust Spring Meeting last week I realize that the days of a wholesale defense of the CWS are likely behind us.In an attempt to correct this mistake, I have focused this month on pushing back against detractors of the consumer welfare standard. First, I kindly put forth edits to the recent letter from the Antitrust Division to the Judiciary Committee Leadership, supporting proposed antitrust legislation. Next, I lay out a path forward for thinking about the CWS in a dynamic economy and defend the CWS in

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Lina Khan’s Privacy Proposals Are at Odds with Market Principles and Consumer Welfare | Truth on the Market

29 days ago

The Federal Trade Commission (FTC) is at it again, threatening new sorts of regulatory interventions in the legitimate welfare-enhancing activities of businesses—this time in the realm of data collection by firms.

Discussion

In an April 11 speech at the International Association of Privacy Professionals’ Global Privacy Summit, FTC Chair Lina Khan set forth a litany of harms associated with companies’ data-acquisition practices. Certainly, fraud and deception with respect to the use of personal data has the potential to cause serious harm to consumers and is the legitimate target of FTC enforcement activity. At the same time, the FTC should take into account the substantial benefits that private-sector data collection may bestow on the public (see, for example, here, here, and

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Why Consumer Welfare Remains the Standard for Antitrust | The Wall Street Journal

April 12, 2022

The consumer-welfare standard, defended eloquently by Phil Gramm and Christine Wilson in “The New Progressives Fight Against Consumer Welfare” (op-ed, April 4), is fundamental to advancing the rule of law in antitrust. It provides a clear benchmark for understanding when business conduct is economically beneficial to consumers, while also benefiting workers and producers.
When producers obtain raw materials more cheaply, savings can be passed on to consumers. When workers are more productive, they tend to earn more and can buy more goods or save money. Worker efficiency helps companies produce more and better goods, reducing prices further. Consumers are emphasized because, in the end, everyone is a consumer.

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Suggested Redline Edits to the DOJ’s Letter to Judiciary Committee Leadership | Truth on the Market

April 5, 2022

The Biden administration finally has taken a public position on parallel House (H.R. 3816) and Senate (S. 2992) bills that would impose new welfare-reducing regulatory constraints on the ability of large digital platforms to engage in innovative business practices that benefit consumers and the economy.

The administration’s articulation of its position—set forth in a March 28 U.S. Justice Department (DOJ letter to House and Senate Judiciary Committee leadership—is a fine example of draftsmanship. With just a few very minor redline edits, which I suggest below, the letter would advance sound and enlightened procompetitive policy.

I hope the DOJ will accept my modest redlines and incorporate them into a new letter to Congress, superseding the March 28 draft. My edited redline

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The NCAA Paying College Athletes is a Bad Idea | Orlando Sentinel

April 5, 2022

Unfortunately, our website is currently unavailable in your country. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to your market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism.

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POLICY SPOTLIGHT | Is Weak Antitrust Enforcement Harming American Competition?

April 4, 2022

The goal of US antitrust laws, broadly speaking, is to curb the efforts of firms to reduce competition in the marketplace or to create or maintain monopolies. In recent years, various critics have claimed that competition in the American economy has declined owing in large part to ineffective antitrust enforcement. These claims do not stand up to scrutiny. Accordingly, current proposals to transform and expand antitrust enforcement are inappropriate and should be rejected.
Critics Propose Antitrust Policy Overhaul
President Joseph R. Biden Jr. and new leaders at the federal antitrust agencies (the Justice Department and the Federal Trade Commission [FTC]) have claimed that competition has declined. They have vowed to pursue much tougher antitrust enforcement through more aggressive cases

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The Federal Government Should Reinstate the 2019 Policy Statement on Standard Essential Patents | IPWatchdog

February 1, 2022

“The [Draft Policy Statement’s] substantive analysis suffers from two serious flaws: the dismissive treatment it accords injunctive relief, and its unnecessary and inappropriate concoction of a suggested framework for SEP licensing.”

The Justice Department’s December 6, 2021 Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (“2021 DPS”) badly misses the mark and merits a failing grade. By contrast, the 2019 PS (issued by the Justice Department, NIST, and the U.S. PTO) is eminently sound, and merits being reaffirmed.
The DPS should be viewed in the context of the benefits conferred on society by patents that read on standards, commonly referred to as standard essential patents (SEPs). Given the

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Crusade Against ‘Big Meat’ Is Latest Example of Misguided Effort to Use Antitrust as Anti-Inflation Tool | Truth on the Market

February 1, 2022

As a new year dawns, the Biden administration remains fixated on illogical, counterproductive “big is bad” nostrums.

Noted economist and former Clinton Treasury Secretary Larry Summers correctly stressed recently that using antitrust to fight inflation represents “science denial,” tweeting that:

There is no basis in economics for expecting increases in demand to systematically larger price increases for monopolies or oligopolies than competitive industries. ,— Lawrence H. Summers (@LHSummers) December 26, 2021In his extended Twitter thread, Summers notes that labor shortages are the primary cause of inflation over time and that lowering tariffs, paring back import restrictions (such as the Buy America Act), and reducing regulatory delays are vital to combat inflation.

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Oldie-But-Baddie: The Revival of an Antitrust ‘Efficiencies Offense’? | Truth on the Market

December 16, 2021

Recent antitrust forays on both sides of the Atlantic have unfortunate echoes of the oldie-but-baddie “efficiencies offense” that once plagued American and European merger analysis (and, more broadly, reflected a “big is bad” theory of antitrust). After a very short overview of the history of merger efficiencies analysis under American and European competition law, we briefly examine two current enforcement matters “on both sides of the pond” that impliedly give rise to such a concern. Those cases may regrettably foreshadow a move by enforcers to downplay the importance of efficiencies, if not openly reject them.

Background: The Grudging Acceptance of Merger Efficiencies

Not long ago, economically literate antitrust teachers in the United States enjoyed poking fun at such

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FTC Challenge to Nvidia-Arm Vertical Merger: Potential Efficiency Justifications | Truth on the Market

December 16, 2021

The Federal Trade Commission (FTC) on Dec. 2 filed an administrative complaint to block the vertical merger between Nvidia Corp., a graphics chip supplier, and Arm Ltd., a computing-processor designer. The press release accompanying the complaint stresses the allegation 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.” According to the FTC:

Because Arm’s technology is a critical input that enables competition between Nvidia and its competitors in several markets, the complaint alleges that the proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition

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Don’t Blame Big Oil Companies for High Gas Prices | Discourse

December 6, 2021

President Biden’s Nov. 17 letter to the Federal Trade Commission (FTC), asking it to investigate “whether illegal conduct is costing families at the pump,” is nothing new. It is in line with decades of political complaints that anticompetitive behavior by big oil and gas companies causes high gasoline prices. Based on past experience, however, it is highly unlikely that the FTC will find that big oil antitrust conspirators are guilty of fleecing the public. Rather, global market forces and government regulation are almost certainly the real culprits.
Less Domestic Oil Supply, More Regulatory Constraints
The petroleum market is an international one, and global fluctuations in crude oil supply and demand directly affect gasoline

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Consumer Welfare-Based Antitrust Enforcement is the Superior Means to Dealing with Large Digital-Platform Competition Issues | Truth on the Market

November 15, 2021

There has been a rapid proliferation of proposals in recent years to closely regulate competition among large digital platforms. The European Union’s Digital Markets Act (DMA, which will become effective in 2023) imposes a variety of data-use, interoperability, and non-self-preferencing obligations on digital “gatekeeper” firms. A host of other regulatory schemes are being considered in Australia, France, Germany, and Japan, among other countries (for example, see here). The United Kingdom has established a Digital Markets Unit “to operationalise the future pro-competition regime for digital markets.” Recently introduced U.S. Senate and House Bills—although touted as “antitrust reform” legislation—effectively amount to “regulation in disguise” of disfavored business activities by

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Aligning Intellectual Property, Antitrust, and National Security

November 9, 2021

Overly Aggressive Antitrust Enforcement Hinders American Technological Leadership and Threatens National Security
As companies from around the world develop the technology and standards for 5G mobile devices and networks, American companies are under threat by aggressive antitrust enforcement that ultimately redounds to the benefit of these foreign companies, which are economic competitors in countries that are also military competitors of the U.S.  Over the past five years, foreign governments, particularly in Asia, have subjected U.S. companies to antitrust investigations that failed to follow basic norms of the rule of law, such as providing basic due process protections.14 These antitrust investigations were a thinly-disguised effort by these countries to force the

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Holding States Accountable for Copyright Piracy

November 9, 2021

What if Copyright Law Does Not Protect Against Theft by State Actors?
Many Americans expect that our copyright laws were enacted to protect their creative output.  This is true when it comes to individual pirates.  However, it is no longer the case when a state actor is the one stealing a copyrighted work, as evidenced by the following illustrative examples of state copyright infringement.
A. Michael Bynum
By way of illustration, consider the struggle of author Michael Bynum to protect his written work from online piracy by a state university.  Bynum is an author and editor of numerous sports history books.  He also owns a publishing company.  He invests time researching, collecting and reviewing documents, conducting interviews, and editing content created by writers

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Employment Contracts Under Federal Antitrust Law, Scalia Law School Center on Law & Economics

November 9, 2021

The emerging antitrust frontier is set to change dramatically the way competition is regulated, and it is being shaped by a confluence of forces — including increased attention from Congress to antitrust issues and a renewed appreciation for the power antitrust laws can wield to control economic players; unconventional coalitions forming to use antitrust as a way to attack so-called “big tech” and other industries seen as posing either economic, social, or political threats; and the incoming Administration’s appointments at the Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC) aggressively, sweepingly, and quickly pursuing campaigns to upend decades worth of antitrust legal precedents and grounding principles.  This Study Group features

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Antitrust Bills: Technology-Company Regulation in Disguise | The Techregister

November 2, 2021

A worker assembles a box for delivery at the Amazon fulfillment center in Baltimore, Md., April 30, 2019. (Clodagh Kilcoyne/Reuters)The proposals toss antitrust’s proper concern to the side and focus exclusively on the market’s biggest actors.
The battle against bona fide competition in the U.S. continues apace. A new antitrust proposal in the Senate, named the “American Innovation and Choice Online Act,” would punish the largest platforms and technology companies for conduct that has been benefiting consumers since goods began to be sold in stores. Under this bill — and its companions in the House — store brands, self-advertising, and large savings at checkout would be found to violate antitrust laws, punishable with fines of up to 15 percent of the company’s revenue.

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Addressing Anticompetitive Conduct In Pharmaceutical Markets: Antitrust Enforcement Is Robust and Effective, but Additional Market-Oriented Legal Reform Would be Helpful

July 13, 2021

US Senate Committee on the Judiciary, Subcommittee on Competition Policy, Antitrust, and Consumer Rights
A Prescription for Change: Cracking Down on Anticompetitive Conduct in Prescription Drug Markets
July 13, 2021
Chair Klobuchar, Ranking Member Lee, and distinguished members of the Subcommittee on Competition Policy, Antitrust, and Consumer Rights:
My name is Alden Abbott, and I am a senior research fellow at the Mercatus Center at George Mason University. My research focuses primarily on antitrust and competition policy. I formerly served as general counsel of the Federal Trade Commission (FTC) and as a senior manager in the FTC’s Bureau of Competition. I have also served in the Antitrust Division and Office of Legal Counsel at the US Department of Justice (DOJ). I welcome the

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FTC Competition Regulation: A Cost-Benefit Appraisal

June 28, 2021

There are recent indications that the Federal Trade Commission (FTC) is seriously contemplating promulgating rules that address competition issues, specifically rules that define particular unfair methods of competition. The FTC has extensive experience in issuing consumer protection rules. FTC regulation of competition through rulemaking, however, would be at odds with a long American tradition of relying on case-by-case antitrust adjudication, rather than rulemaking, to deal with practices that harm the competitive process.
This longstanding history of avoiding a regulatory approach to antitrust enforcement counsels caution. Before proceeding with competition rulemaking, the FTC should carefully consider whether the benefits of such rulemaking would outweigh the costs, given the

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The Globalization of Antitrust

May 26, 2021

Although antitrust laws were first enacted in the United States, today almost all nations have adopted “competition laws,” as they are generally known. In “The Globalization of Antitrust: History and Prospects,” Alden Abbott argues that the spread of these laws has benefits and risks. Washington should engage with multilateral institutions and other countries to promote antitrust policies that advance economic growth and innovation.
Putting US Consumers First
Antitrust laws are designed to curb efforts by firms to reduce competition in the marketplace or to create monopolies. Since the mid-1990s, US antitrust policy has been guided by a bipartisan consensus that consumer welfare is the chief consideration. Under this consumer welfare standard, aggressive competition that promoted expansion

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US Antitrust Laws: A Primer

March 23, 2021

US antitrust laws, broadly speaking, aim to curb efforts by firms to reduce competition in the marketplace or to create or maintain monopolies. These laws proscribe certain mergers and business practices in general terms, leaving courts to decide in specific terms which mergers and practices are illegal based on the facts of each case. Courts have applied the antitrust laws to changing markets, from a time of horses and buggies to the present digital age. Yet for many years, US antitrust laws have had the same basic objective: to protect the process of competition for the benefit of consumers, making sure that businesses have strong incentives to operate efficiently, keep prices down, and keep quality up. Though imperfect in application (like all legal institutions), the modern

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