The Competitive Enterprise Institute (CEI) published a new paper making the case against regulating social media platforms as common carriers. In Don’t Confuse the Platform with the Train: The Case Against Regulating Social Media Companies as Common Carriers, co-authors Dan Greenberg and Jessica Melugin make the case that government encroachment on speech, property, and economic liberty are the wrong way to deal with widespread frustration about content moderation decisions on the part of social media companies.

News

Op-eds, articles, and commentary from CEI experts on antitrust.

Ryan Young, CEI.org - March 21, 2022

Last year, District of Columbia Attorney General Karl Racine filed an antitrust lawsuit against Amazon over its third-party seller program. On Friday, a judge dismissed it. When it was first filed, my colleague Jessica Melugin and I argued that the lawsuit stood on shaky legal ground and would harm consumers if it succeeded.

Ryan Young, CEI.org - March 18, 2022

Yesterday, I wrote about four problems with Sen. Elizabeth Warren (D-MA) and Rep. Mondaire Jones (D-NY)’s new antitrust bill, the Prohibiting Anti-Competitive Mergers Act. There is a fifth problem: Its $5 billion threshold for automatically rejecting mergers is not indexed for inflation.

Ryan Young, CEI.org - March 17, 2022

There is yet another antitrust bill in Congress. The Prohibiting Anticompetitive Mergers Act, sponsored by Sen. Elizabeth Warren (D-MA) and Rep. Mondaire Jones (D-NY), seeks to prevent big tech mergers larger than $5 billion. While companies could appeal this automatic denial in court, they would have to prove the Federal Trade Commission, the Justice Department, or both acted in an “arbitrary and capricious” manner in denying a merger. That is an uphill climb that stacks the deck against companies, and may dissuade many from even trying.

Ryan Young, Wall Street Journal - March 13, 2022

Arizona Attorney General Mark Brnovich has opened an antitrust investigation into investment funds centered around environmental, social and governance (ESG) goals. He argues that they are financing a coordinated political agenda (“ESG May Be an Antitrust Violation,” op-ed, March 7). First Amendment concerns and the heavy legal lift of proving collusion aside, this investigation is wrongheaded for two reasons.

Jessica Melugin, National Review - February 18, 2022

In a recent Wall Street Journal op-ed, a venture capital investor in the e-commerce firms Deliverr and Wish calls for breaking up Amazon because of its alleged predatory pricing. Although it’s tempting to dismiss that charge as a competitor’s sour grapes, it would be better to refute the argument on its merits, lest someone picks it up and runs with it.

Alex Reinauer, CEI.org - February 15, 2022

Last July, 36 state attorneys general filed an antitrust suit against Google focusing on app distribution for Android devices through the Google Play Store. The 144-page complaint is filled with blunders, but the allegations on security warnings that accompany third-party downloads demonstrate a particularly limited understanding of cybersecurity, open-source software, and technology in general. The lawsuit shares sentiment with the Open App Markets Act (S. 2710), which seeks to force companies like Apple to permit third-party applications. Both ignore the increased security risks to consumers.

Ryan Young, CEI.org - February 4, 2022

Thursday brought some interesting news, none of which were kind to the Federal Trade Commission’s (FTC) antitrust case against Facebook.

Jessica Melugin, Real Clear Policy - January 27, 2022

The American Innovation and Choice Online Act, which advanced out of the Senate Judiciary committee after a markup last Thursday, will hurt U.S. consumers and concentrate even more power at the Federal Trade Commission. Republicans, even those who quarrel with ‘Big Tech’ firms over speech issues, should be wary of this legislation.  

Jessica Melugin, CEI.org - January 25, 2022

Microsoft’s couldn’t have picked a more inauspicious day to announce its planned acquisition of gaming company, Activision Blizzard. The news came concurrently with antitrust regulators at the Federal Trade Commission (FTC) and the Department of Justice announcing their intent to rewrite and expand merger rules to “accurately reflect modern market realities.”

Jessica Melugin, CEI.org - January 19, 2022

Perhaps Congress’ enthusiasm for ongoing government oversight of business decisions, embodied in tomorrow’s closed door markup of the American Innovation and Choice Online Act (S. 2992), is best explained by a quote from economist Ronald Coase:

Revived FTC Antitrust Suit Against Facebook Could Put Chill on Innovative Acquisitions in Tech Industry

Jessica Melugin, Ryan Young, CEI.org - January 11, 2022

As imagined in Lewis Carroll’s classic, having gone down the rabbit hole, a bewildered Alice learns from the Cheshire Cat that, if you don’t know your destination, any road will take you there. Perhaps this explains much at the Federal Trade Commission these days, which, having gone down a regulatory rabbit hole, increasingly dwells in an antitrust Wonderland of its own creation. 

Iain Murray, The Dispatch - December 27, 2021

Big business has become a point of friction between conservatives and classical liberals, especially social media and other internet companies that fall under the heading of Big Tech. 

Jessica Melguin, OpenMarket - December 16, 2021

The idea that the countless decisions and dispersed knowledge of markets—which are currently delivering record rates of start-ups, huge R&D investments and innovations like decentralized social media—could be micromanaged by regulators without costs to innovation, profitability, and consumers is contrary to history.

Iain Murray, Real Clear Policy - November 24, 2021

The U.S. Department of Justice’s (DOJ) antitrust suit to stop the merger of publishers Penguin Random House and Simon & Schuster has not gained as much attention as cases targeting “Big Tech” companies, but it nevertheless illustrates antitrust authorities’ renewed confidence that they can use the law to stop any mergers between large companies. 

Bruce Kobayashi, Tim Muris, Barrons - October 1, 2021

As imagined in Lewis Carroll’s classic, having gone down the rabbit hole, a bewildered Alice learns from the Cheshire Cat that, if you don’t know your destination, any road will take you there. Perhaps this explains much at the Federal Trade Commission these days, which, having gone down a regulatory rabbit hole, increasingly dwells in an antitrust Wonderland of its own creation. 

FAQ

Questions and answers on CEI's antitrust policy position.

Antitrust, Explained

The Competitive Enterprise Institute (CEI) launched a new video, “Antitrust Explained,” disputing recent calls by politicians and academics to use antitrust laws and regulations to break up large companies. 


The video provides a history of antitrust policy in the United States and explains the negative impact these laws and regulations can have on the market, consumers, and our economy.

1. What is antitrust?


Today’s body of antitrust laws is the culmination of over one hundred years of unclear objectives, contradictory interpretations, and controversial court decisions. At its most basic, antitrust is regulation restricting certain business arrangements and decisions. In the U.S., the stated aim of antitrust law is preserving competition in the marketplace to the benefit of consumers.


2. Why was antitrust created and what’s its history in the U.S.?


The earliest impulses towards federal antitrust legislation grew out of dissatisfaction with the railroads of the late nineteenth century, which were themselves government granted monopolies. When the problematic results of this government-created uneven playing field began to surface, so did political alliances calling for corrective government action. To that end, rate discrimination was outlawed with the passage of The Interstate Commerce Act passed in 1887. By 1888, antitrust planks appeared in both of the major political party’s platforms..

In a paper for the Competitive Enterprise Institute (CEI), senior fellow Mario Loyola writes that unlike their federal counterparts, antitrust enforcers at the state level often use antitrust law to shield powerful local constituents from competition. In The State Antitrust Paradox, Loyola argues that state-level policymakers would benefit from absorbing the key insights of Bork’s book. He makes four concrete recommendations that would help ensure consumer welfare is at the center of state-level antitrust enforcement.

Read the full paper here.

Web Memo

How Antitrust Regulation Hinders Innovation and Competition.

Few economic concepts elicit such strong reactions as that of monopoly, and the policy intended to address it—antitrust regulations (called competition policy in the European Union). Yet, both supporters and opponents of antitrust regulations agree on one fundamental point—that effective competition is vital to the American economy and the welfare of its citizens. However, they differ in how the law should encourage this. There are essentially three schools of thought regarding antitrust policy:

Regulators should use the law proactively to break up companies that are abusing their market power and restore a competitive market. The size of a company is a good guide as to when this should be done.

Interventionist

1

Abuse of market power is rare and dominant market positions can be achieved through delivering improvements in consumer welfare. Therefore, antitrust laws should be used not to break up companies that have grown big through successful competition, but to address instances of collusion, price fixing, or other anti-competitive behavior.

2

Consumer Welfare

Antitrust law is unnecessary. Market processes routinely undermine monopolies—and attempts to create monopolies. Laws against “unfair competition” prevent property owners from experimenting with joint ventures and other innovations that can improve consumer welfare.

Free Market

3

Antitrust Skeptic's Bibliography

Selected readings on antitrust.

For more than two decades, the willingness of policy makers to rethink the presumption that economic regulation automatically benefits consumers has driven the deregulation of the transportation, telecommunications, banking, and electricity sectors. Yet antitrust regulation enjoys continued esteem in both the business and popular press. High-profile antitrust enforcement actions increasingly constitute a business hazard for aggressive, successful firms, threatening to disrupt innovation and economic growth.

Since economic regulations—including antitrust—transfer wealth, they inevitably attract political entrepreneurs seeking entry or price regulation to hobble or preempt competition. Thus, a more skeptical interpretation of antitrust activism is that antitrust benefits political "entrepreneurs" rather than consumers. Such enforcement for competitive advantage often harms consumers by increasing prices and decreasing output by undermining little-understood efficiencies. Rethinking the true impact of these practices, from "collusion" to "predatory pricing" to "discrimination," should be a goal of policy makers.

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