Tech Monopoly

Ebook
On sale Aug 06, 2024 | 226 Pages | 9780262379274

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A serious look at competition problems in tech markets and whether antitrust law can help address them.


In recent years, the astronomical rise of tech giants like Amazon, Apple, Meta, and Microsoft has been criticized as anticompetitive, and many have wondered if antitrust law can help protect workers and consumers. In Tech Monopoly, Herbert Hovenkamp explores competition problems in a wide range of high-tech firms—from those that sell purely digital products, such as video streaming, search, software, or email services, to others that sell more traditional “tactile” products, such as hardware, clothing, groceries, or rides. He offers a realistic look at the powers and limitations of antitrust law in tech markets with an assessment that is as comprehensive as it is accessible.

After a general introduction to antitrust law, Tech Monopoly considers how competitive harm should be assessed in these markets, as well as some features that make these markets unique, including “two-sided” structures. Then Hovenkamp looks at the role of large digital platforms, including Amazon, Alphabet, Apple, Meta, and Microsoft, and considers whether their size alone is an antitrust problem or if the concern should be limited to market power. Finally, the author addresses the very difficult problem of remedies. Should we “break up” big tech, and if so, how? What kind of breakup of these firms would make users or others better off? And if breakups are not the only possible antitrust fix, are there more effective and less disruptive alternatives?

Offering simple explanations of the complex economics of digital platform markets, Tech Monopoly is an important read for anyone who wishes to understand how antitrust law works and whether it can help defend competition in the formidable era of big tech.
Preface: Antitrust and Big Tech   v
Chapter 1: Introduction: the Antitrust Laws 1
A Thumbnail History 1
The Scope of Antitrust 5
What Conduct Violates the Antitrust Laws? 8
Restraints of Trade, Horizontal and Vertical 8
Monopolization 13
Price Discrimination 15
Anticompetitive Mergers 17
Antitrust and Economics 19
The Principal Schools of Antitrust Thought 22
Conclusion: the Goals of the Antitrust Laws 27
Chapter 2: Antitrust and Power 30
Market Power 30
“Power?” or “Size”? 38
Market Power and Efficiencies 43
Market Power, Patents and Other Intellectual Property Rights 47
When Must Market Power Be Measured? The Per Se Rule 50
The Rule of Reason 51
“Switching Costs” and Barriers to Entry 53
Human Behavior and Market Power 59
Two-Sided Platforms, Attention Markets, and “Winner-Take-All” 61
Chapter 3: Anticompetitive Conduct and Big Tech 66
Introduction 66
The Nature of Competitive Injury 68
Monopolization: Exclusionary Practices by Dominant Firms 70
Refusal to Deal and “Self-preferencing” 72
Anticompetitive Practices Involving Intellectual Property (IP) 78
Anticompetitive Distribution, Including Pricing 82
Attempt to Monopolize and “Abuse of Dominance” 87
Anticompetitive Agreements and Default Rules 90
Anticompetitive Tech Mergers 98
Conclusion 102
Chapter 4: Antitrust Solutions for Tech Monopoly Problems 104
Introduction 104
Remedies and Causation 107
Injunctions and Damages 109
Structural Remedies – “Breakups” 112
Breaking Into the Monopoly 114
Remedies and “Winner-Take-All” Markets 117
Interoperability and Portability as Antitrust Remedies 122
Reorganizing Management Instead of Firms 133
Conclusion 137
Glossary 138
Suggestions for Further Reading 147
Herbert Hovenkamp is the James G. Dinan University Professor at the University of Pennsylvania Carey Law School and the Wharton School. He is a Fellow of the American Academy of Arts and Sciences, and in 2008, he won the Justice Department’s John Sherman Award for lifetime contributions to antitrust law.

About

A serious look at competition problems in tech markets and whether antitrust law can help address them.


In recent years, the astronomical rise of tech giants like Amazon, Apple, Meta, and Microsoft has been criticized as anticompetitive, and many have wondered if antitrust law can help protect workers and consumers. In Tech Monopoly, Herbert Hovenkamp explores competition problems in a wide range of high-tech firms—from those that sell purely digital products, such as video streaming, search, software, or email services, to others that sell more traditional “tactile” products, such as hardware, clothing, groceries, or rides. He offers a realistic look at the powers and limitations of antitrust law in tech markets with an assessment that is as comprehensive as it is accessible.

After a general introduction to antitrust law, Tech Monopoly considers how competitive harm should be assessed in these markets, as well as some features that make these markets unique, including “two-sided” structures. Then Hovenkamp looks at the role of large digital platforms, including Amazon, Alphabet, Apple, Meta, and Microsoft, and considers whether their size alone is an antitrust problem or if the concern should be limited to market power. Finally, the author addresses the very difficult problem of remedies. Should we “break up” big tech, and if so, how? What kind of breakup of these firms would make users or others better off? And if breakups are not the only possible antitrust fix, are there more effective and less disruptive alternatives?

Offering simple explanations of the complex economics of digital platform markets, Tech Monopoly is an important read for anyone who wishes to understand how antitrust law works and whether it can help defend competition in the formidable era of big tech.

Table of Contents

Preface: Antitrust and Big Tech   v
Chapter 1: Introduction: the Antitrust Laws 1
A Thumbnail History 1
The Scope of Antitrust 5
What Conduct Violates the Antitrust Laws? 8
Restraints of Trade, Horizontal and Vertical 8
Monopolization 13
Price Discrimination 15
Anticompetitive Mergers 17
Antitrust and Economics 19
The Principal Schools of Antitrust Thought 22
Conclusion: the Goals of the Antitrust Laws 27
Chapter 2: Antitrust and Power 30
Market Power 30
“Power?” or “Size”? 38
Market Power and Efficiencies 43
Market Power, Patents and Other Intellectual Property Rights 47
When Must Market Power Be Measured? The Per Se Rule 50
The Rule of Reason 51
“Switching Costs” and Barriers to Entry 53
Human Behavior and Market Power 59
Two-Sided Platforms, Attention Markets, and “Winner-Take-All” 61
Chapter 3: Anticompetitive Conduct and Big Tech 66
Introduction 66
The Nature of Competitive Injury 68
Monopolization: Exclusionary Practices by Dominant Firms 70
Refusal to Deal and “Self-preferencing” 72
Anticompetitive Practices Involving Intellectual Property (IP) 78
Anticompetitive Distribution, Including Pricing 82
Attempt to Monopolize and “Abuse of Dominance” 87
Anticompetitive Agreements and Default Rules 90
Anticompetitive Tech Mergers 98
Conclusion 102
Chapter 4: Antitrust Solutions for Tech Monopoly Problems 104
Introduction 104
Remedies and Causation 107
Injunctions and Damages 109
Structural Remedies – “Breakups” 112
Breaking Into the Monopoly 114
Remedies and “Winner-Take-All” Markets 117
Interoperability and Portability as Antitrust Remedies 122
Reorganizing Management Instead of Firms 133
Conclusion 137
Glossary 138
Suggestions for Further Reading 147

Author

Herbert Hovenkamp is the James G. Dinan University Professor at the University of Pennsylvania Carey Law School and the Wharton School. He is a Fellow of the American Academy of Arts and Sciences, and in 2008, he won the Justice Department’s John Sherman Award for lifetime contributions to antitrust law.

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