Spotlight on the FTC’s Hearings on Competition and Consumer Protection

November 2018

Spotlight on the Federal Trade Commission’s Hearings on Competition and Consumer Protection

By Tianran “Tinny” Song (Labaton Sucharow)¹

Introduction

The Federal Trade Commission’s Hearings on Competition and Consumer Protection in the 21st Century at George Mason University’s Scalia Law School featured a discussion on the antitrust framework for evaluating acquisitions of potential or nascent competitors in digital marketplaces. Speakers addressed issues such as determination of the appropriate framework for evaluating these acquisitions, whether current antitrust law is sufficient for developing challenges, and what pragmatic approaches antitrust enforcement agencies could consider in evaluating whether there was anticompetitive harm.

The Current Framework of Analysis

The first panel focused on the current framework for evaluating mergers between incumbents and nascent competitors, and how that framework fits within the current law and merger guidelines. Opening remarks delivered by Susan Athey and Paul T. Denis introduced this issue. Speaking from her experience as the Economics of Technology Professor at Stanford Graduate School of Business, Athey grounded the issue in basic platform economics: incumbents may be incentivized to block new startups while new startups seek to disrupt the incumbents; however, resource-abundant incumbents may have clear advantages in raising barriers to entry and making it harder for low-cost entry into the market. Addi