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by 360walk
1863 days ago
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As an economist, what do you think of the Amazon Antitrust Paradox? https://www.yalelawjournal.org/note/amazons-antitrust-parado... > The current framework in antitrust fails to register certain forms of anticompetitive harm and therefore is unequipped to promote real competition—a shortcoming that is illuminated and amplified in the context of online platforms and data-driven markets. This failure stems both from assumptions embedded in the Chicago School framework and from the way this framework assesses competition. > Notably, the present approach fails even if one believes that antitrust should promote only consumer interests. Critically, consumer interests include not only cost but also product quality, variety, and innovation. Protecting these long-term interests requires a much thicker conception of “consumer welfare” than what guides the current approach. But more importantly, the undue focus on consumer welfare is misguided. It betrays legislative history, which reveals that Congress passed antitrust laws to promote a host of political economic ends—including our interests as workers, producers, entrepreneurs, and citizens. It also mistakenly supplants a concern about process and structure (i.e., whether power is sufficiently distributed to keep markets competitive) with a calculation regarding outcome (i.e., whether consumers are materially better off). > Antitrust law and competition policy should promote not welfare but competitive markets. By refocusing attention back on process and structure, this approach would be faithful to the legislative history of major antitrust laws. It would also promote actual competition—unlike the present framework, which is overseeing concentrations of power that risk precluding real competition. |
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But... I didn’t think much of it the first time. I don’t think the claims are well motivated. I think she assumes “Amazon bad” from the beginning and contorts some not-very-strong arguments in favor of that conclusion.
I do remember the claim in the first quoted paragraph that there was something unique about the threat (I guess that’s how she sees it?) posed by Amazon. That had the potential to be an interesting claim, but I really didn’t see any evidence to back it up in the article.
The second quoted paragraph contains one suggestion which is just completely false: that consumer product variety is limited by Amazon. I mean, have you ever tried to wade through pages of junk to find the thing you searched for? I have. There is an absolute profusion of goods on the site. That claim does not stand up to the slightest scrutiny.
If the idea is instead that the fact that most consumers choose amazon instead of some other retailer is the channel by which variety is harmed, well... that also does not stand up to scrutiny in a world with Walmart and target and Etsy and a million other online retailers.
The thing in the same paragraph about the “legislative history” of antitrust is Khan’s idea to try to reorient antitrust law with (from my recollection) a specific desire to punish or break up Amazon in particular in mind. The claim that Amazon does not compete in a competitive market which is supposed to justify this does not stand up to scrutiny either.
I don’t agree (in the third paragraph) that antitrust should be reoriented away from a consumer welfare standard, but even if I did, I think Amazon does compete in competitive markets already! (Why would we orient away from consumer welfare anyway? Would we like (e.g.) all consumers to pay higher prices (lowering welfare) but have the “product variety” provided by hypothetical, post-break-up Amazons 1, 2 and 3? What would be the point of that?)
My overall impression was that the entire article was written with the conclusion “Amazon is bad” in mind.