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The Case for Preemptive Oligopoly Regulation
Get PDFOne of the few things former President Donald Trump and leading Democrats appear to agree on is the need to subject Big Technology (“Big Tech”) firms to antitrust scrutiny. But unsurprisingly they disagree about how to address the problem. Senator Elizabeth Warren and many other leading Democrats have called for breaking up large technology firms, such as Google, Amazon, and Facebook, in a revival of the trust-busting progressive era of the early twentieth century. In contrast, the Trump administration triggered more traditional antitrust monopoly review of potential anticompetitive activities of a number of leading technology firms, which is more likely to lead to financial sanctions (or more modest consequences).
This Article argues that politicians may be identifying a legitimate concern about the market power of actors in highly concentrated markets. But they are looking at the problem through the wrong lens. The larger concern is less monopoly and more oligopoly domination (and more the potential than the current impact of oligopolies on the marketplace). The challenge of oligopolies is that it is difficult to monitor the individual and collective exercise of market power by oligopolists. Existing oligopoly regulation in the United States is almost exclusively reactive and fails to identify and address the potential impact of market concentration with the notable exception of the Federal Trade Commission’s and Department of Justice’s review of prospective mergers. The Article makes the case for creating a mandate for federal regulators to oversee oligopolies in a preemptive way in order to better identify the potential for market abuses and to open up concentrated markets to greater competition. The underlying logic is that even if regulators cannot pinpoint antitrust violations in the present, the higher the degree of market concentration the greater the risk that oligopolies will possess and exercise market power to entrench their power and undercut competition. But rather than focusing on invasive divestments, this Article suggests that policymakers consider employing a range of disclosure rules, regulatory exemptions, and tax incentives to level the playing field for smaller competitors in oligopolistic markets.
This Article focuses on the imperative for antitrust oversight of “filtering” or “access oligopolies” who serve as gatekeepers against fraud, data aggregators, and screeners of information and reputation. A small number of oligopolists dominate internet searches, social networking, online shopping, and more traditional spheres of accounting, rating agencies, and investment banking. Participants in these concentrated markets can easily engage in conscious parallelism to mimic one another’s prices and practices because of the homogenous nature of the goods or services they provide. But the defining feature of many of these oligopolists is that they have prioritized market share growth and entrenchment by focusing on economies of scale, network benefits, and barriers to entry, rather than the conventional supracompetitive pricing that monopolists and oligopolists have embraced in the past. In fact, the paradox of many of these filtering intermediaries is that they may even enhance consumer welfare, such as by offering internet searches or messaging for “free” to consumers, while at the same time leveraging their market power to pressure corporate clients to adopt or retain their services.
Conventional antitrust regulation focuses on preventing monopolists’ abuse of their market power to distort market pricing. In contrast, antitrust regulation of oligopolies is almost exclusively reactive and limited in scope. Regulators prohibit express collusion among oligopolies and impose limits on their expansion through mergers and acquisitions based on the potential impact on market concentration. But regulators lack the means to remedy the underlying entrenchment of oligopolies and the resulting market distortions when there is no evidence of express communication or circumstantial evidence of agreement among the parties.
This Article will suggest that antitrust regulators sustain preemptive periodic oversight of highly concentrated markets (rather than react primarily in response to merger reviews), impose heightened disclosures on oligopolists to facilitate monitoring, and seek to open up these markets to greater competition by lowering the regulatory, disclosure, and tax barriers to entry for small market participants. This approach may not satisfy those echoing politicians’ calls for mandatory divestments, but it is designed to recognize that high levels of market concentration heighten the potential danger of collusion and leveraging of market power by oligopolists
I Just Took a DNA Test—Turns Out, I\u27m 100% Breaching My Donor Anonymity Contract: Direct-to-Consumer DNA Testing and Parental Medical-Decision-Making
Get PDFPart I of this note provides a brief history of assisted reproductive technology and its increased use throughout the world, illustrating the growing number of donor-conceived children and the related importance of knowing genetic information. Part I also surveys regulations concerning donor anonymity in the United States and the United Kingdom to illustrate different jurisdictions\u27 approaches to the regulation of donor anonymity. This note uses the United Kingdom as a model of countries that have prohibited sperm donor anonymity. Part II of this note discusses direct-to-consumer DNA testing, specifically 23andMe\u27s products. This note selects 23andMe as the direct-to-consumer company for its analysis because of the company\u27s dominance in the global market and the regulation of certain kits as medical devices, 35 which suggests parents\u27 rights to have this test performed on their minor children. Part III of this note explores parental decision-making abilities as they relate to medical decisions concerning minors. Part IV of this note discusses the interplay between donor anonymity and DNA testing, both in the United States and the United Kingdom.
The conclusion of this note discusses possible solutions for the issues presented by regulations concerning donor-conceived genetic information. It also highlights the benefits of allowing access to genetic information of donor-conceived individuals, specifically by allowing parents to genetically test their donor-conceived children. Ultimately, the analysis concludes that donor anonymity is no longer feasible. Instead, this note suggests countries continue to adopt and amend regulations that enable donor-conceived individuals to have access to their own genetic information without fear of redress against them, or their parents
Rethinking Copyright Harmonization
Get PDFFor nearly half a century, the United States has been one of the main proponents of harmonizing the world’s copyright laws. To that end, the U.S. government has worked diligently to persuade (and, in some cases, bully) most of the world’s countries to adopt copyright standards that resemble those found in the United States. The primary reason for this push to harmonize the world’s copyright laws is simple: the United States has long been a net exporter of copyrighted works, and so the U.S. government has sought to ensure that other countries provide U.S. authors with the same economic rights those authors enjoy at home.
But that rather simple calculus in favor of copyright harmonization has changed. Today, the U.S. government must also take into account the interests of its technology sector in determining its positions on both domestic and international copyright law efforts. This is because technology providers are also a significant export of the United States, and their copyright interests do not always align with those of large copyright owners. For instance, many of those technology companies, including Google and Twitter, use copyrighted works as a vital part of providing their technological services, including by way of exhibiting copyrighted content at the direction of their users, in response to user searches, or as part of services such as Google News. Consequently, continuing to ratchet up worldwide copyright standards through international harmonization may often negatively affect the interests of such companies by restricting their ability to use copyrighted works liberally within their services. In short, with these new technological entrants, the political economy of copyright harmonization has significantly changed, and those changes are poised to exert considerable influence on copyright’s global future.
In this Article, I map out the key players in copyright’s new political economy, and I grapple with how their often-divergent interests are likely to affect global copyright law and policy making going forward. I then examine the European Union’s newly minted Copyright Directive as an example of these divergent forces at play within the United States, Europe, and elsewhere. Finally, I assess whether the altered political economy of copyright harmonization is a positive or negative development.
Cans and Joint Degrees: Making a Difference in Sustainability
No full textScott Breen, JD/MPA 2015, the vice president of sustainability at the Can Manufacturers Institute, describes his work and career path, how he became involved with sustainability and aluminum can recycling, his work with his Sustainability Defined podcast, and the benefits of earning a joint JD-MPA degree.https://www.repository.law.indiana.edu/coldcall/1000/thumbnail.jp
Legitimacy, Flexibility and Administrative Law
Get PDFThis dissertation reassesses the importance of flexibility in ensuring the legitimacy of the administrative state and argues how administrative law should accommodate the ever-growing agency discretion without sacrificing the legitimacy of the agencies. Flexibility results from an agency’s exercise of its interpretative power with statutory ambiguities and is the most significant ingredient of the modern administrative state. However, flexibility does not mean anything goes. There should be limits. The proper latitude of judicial review is the essential device that makes the administrative state legitimate. From the perspective of a traditional approach of U.S. administrative law, giving agencies flexibility evokes the image of an executive unbounded. Per that principle, critics of the modern administrative state argue that congressional delegation should not be overused because agency authority in the face of statutory authority is very discretionary and too flexible. In the same vein, certain conservative Supreme Court Justices advocate overruling the Chevron doctrine and instituting a narrow approach to the nondelegation doctrine. This dissertation takes a contrary approach to agency discretion. Broad agency discretion is a positive development and one which courts should honor as long as an agency’s interpretation is within the statutory authority and not arbitrary or capricious. It examines both agency deregulation and regulation. Utilizing agency deregulatory regimes, it visualizes what aspect of agency policy judgment triggers the warning light that fuels legitimacy concern. It shows that the over-reliance on nondelegation defeats the purpose of flexibility that provides democratic accountability to our governance structures, giving courts redundant power to reverse congressional legislature. It suggests that the fundamental gauge to evaluate the legitimacy of agency decisions must be agency expertise anchored in the statutory ends
What\u27s the Deal with Revlon?
Get PDFUnder the Revlon doctrine, courts are to apply a higher level of scrutiny in certain takeover situations in an attempt to control potential conflicts of interest that might prejudice target shareholders. However, the doctrine has always had sufficient “play in the joints” that one might reasonably wonder whether it has much of an effect in practice on short-term shareholder returns. Additionally, in recent years, the trend in Delaware’s Revlon jurisprudence seems to be to defer to the target board as long as there are no glaring conflicts of interest. Taken together, these facts raise concern over the continued relevance of the Revlon doctrine.
It turns out this concern is justified. In this Article, I present evidence that Revlon has a significant effect on the type of sales process that target boards adopt—when in Revlon mode, they pursue active market checks with greater frequency, engage with more potential bidders and receive more bids. However, this difference in process has no discernible effect on shareholder returns, whether measured as abnormal market returns upon deal announcement or deal premia. And yet, there is still evidence, in this study and others, that conflicts of interest abound.
In other words, the modern incarnation of Revlon no long appears up to the task for which it was intended. Consequently, I argue that courts should reorient the doctrine around a robust review of the types of conflicts of interest that might actually harm target shareholders. Additionally, if as the Delaware Supreme Court has indicated, target shareholders might ratify the types of problems Revlon was intended to address through the mandatory statutory merger vote requirement, it will be necessary to adopt additional securities disclosure rules to provide shareholders with sufficient information to make an informed ratification decision
The Economic Case for Rewards Over Imprisonment
Get PDFThere seems to be a growing social consensus that the United States imprisons far too many people for far too long. But reform efforts have slowed in the face of a challenging question: How can we reduce reliance on prisons while still discouraging crime, particularly violent crime? Through the 1970s, social scientists believed the answer was an array of what I will call preventive benefits: drug and mental health treatment, housing, and even unconditional cash payments. But early evaluations of these programs failed to find much evidence that they were successful, confirming a then-developing economic theory that predicted the programs would fail.
This Article calls for a return to prevention. It first surveys evidence showing that a large fraction of prison spending has no incremental effect on crime reduction. And it offers the first detailed summary of the modern evidence on prevention. Preventive benefits have now been proven effective in a variety of settings. Along the way, I argue that a famous federal study of cash benefits was fundamentally misinterpreted as failure by its own authors.
Next, I lay out the theoretical economic case for preventive benefits. Standard theory rejects benefits because they are said to cost too much and to potentially encourage some individuals to engage in risky behavior in order to be paid to stop. I suggest both these arguments rely on evidentiary claims that have now been found to be largely false.
In addition, I collect and synthesize a series of theoretical reasons why benefits would outperform imprisonment. Among others, benefits enrich crime-stricken communities instead of further impoverishing them, as prison does. This simple fact has several important theoretical dimensions. I also show the ways in which the potential to deliver rewards ex ante, or before a crime has been committed, help to overcome a basic failing of prison: they do not require that humans be highly attentive to future consequences
Payment Issues for Directors and the Lawyers Advising Them
No full textProfessor Hughes\u27 contribution to this volume is chapter 15 Payment Issues for Directors and the Lawyers Advising Themhttps://www.repository.law.indiana.edu/facbooks/1262/thumbnail.jp
Debt\u27s Emotional Encumbrances
No full textProfessor Foohey\u27s contribution to this volume is chapter 14 Debt\u27s Emotional Encumbranceshttps://www.repository.law.indiana.edu/facbooks/1270/thumbnail.jp