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Wednesday, September 14, 2016

American Antitrust Is Having a Moment: Some Reactions to Commissioner Ohlhausen’s Recent Views

Chris Sagers at ProMarket:

American Antitrust Is Having a Moment: Some Reactions to Commissioner Ohlhausen’s Recent Views: Over the summer, Federal Trade Commissioner Maureen Ohlhausen took me and several others to task in a speech, subsequently published as a journal article... The theme we’d all written about is whether we in the United States have a “monopoly problem,” and whether federal policy should try to do something about it. ...

Commissioner Ohlhausen had some pretty strong words. ... Specifically, she implies a very strong presumption against public interference in private markets, as indicated by her argument that there is not yet sufficient evidence that we have a monopoly problem. The argument seems to be that we must wait until we are very, very sure, beyond any reasonable econometric doubt, apparently, that there’s something wrong before we step in. ...
She is mistaken, and she ignores roughly a library-full of well-known..., sophisticated empirical work. ...
In the end, the irony of these remarks is captured in this point: Commissioner Ohlhausen is pretty witheringly dismissive of a certain kind of evidence of market power, and implies that it would not support increased enforcement unless it can overcome a high methodological bar. But for her own countervailing evidence that in fact American markets are “fierce[ly] competiti[ve],” she says this:  “Consider the new economy, which is a hotbed of technological innovation. That environment does not strike me as one lacking competition.”
In other words, the presumption against antitrust is so strong that evidence of harm must meet the most exacting standards of social science. To prove that markets are in fact competitive, however, needs nothing more than seat-of-the-pants anecdotes. Again, I mean no disrespect, and I think we have an honest difference of opinion. But this stance is not social science, and it is not good, empirically founded public policy. It is just ideology. ...
It’s definitely true that the agencies have brought a bunch of challenges to a bunch of nasty mergers, and perhaps total enforcement numbers have gone up a bit. But that is because we are in the midst of a merger wave in which parties have been proposing breathtakingly massive, overwhelmingly consolidating horizontal deals. While there is a track record to be proud of in the administration’s enforcement, especially, as the commissioner observes, in the Commission’s campaign against hospital mergers, reverse-payment deals, SEP problems, and patent trolls, and who knows how many other matters, the fact remains that by and large the administration has mostly not taken action that any administration would not have taken, including the Reagan and both Bush administrations. ...

    Posted by on Wednesday, September 14, 2016 at 10:44 AM in Economics, Market Failure, Regulation | Permalink  Comments (28)


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