As always, this year's "State of the Net" conference features a variety of breakout sessions from which to choose and, sadly, until I figure out a way to clone myself, I can't cover them all. So, I decided to sit in on the panel about "Antitrust in the Internet Era," since it's a subject I find of great interest. It featured the following lineup:
- David Balto, Center for American Progress (moderator)
- Brian Bieron, Senior Director of Federal Affairs, eBay
- Joseph Farrell, Director of the Bureau of Economics, Federal Trade Commission
- Roberta Katz, U.S. Department of Justice
- Catherine Sandoval, Santa Clara University School of Law
Here's a summary of some of the highlights:
David Balto
- Internet has empowered consumers with more and better information that they did not have in past
Roberta Katz, U.S. Department of Justice
- Says many companies exist today only because of Microsoft case
- public became more educated about Net because of the case
- Christine Varney & Obama Admin more sensitive to innovation concerns & serious about antitrust intervention
- Says Ticketmaster-Live Nation deal was anti-competitive but behavioral & structural remedies will address concerns
- Everything is case-by-case and fact-specific; fact are important
Joseph Farrell, Federal Trade Commission
- going too far to judge MS case based on state of operating system competition
- competition policy crucial to innovation, incentives, openness & opportunity
- incentives for incumbents vs. openness to others is where debate is at
- Key tension = If you protect property rights on one side, you affect innovation and openness on the other side
- Do you try to fix problems or prevent them? antitrust law does both but can be slow
- criticizes Chicago School thinking on vertical restraints and mergers; says it shouldn't "hamstring" antitrust with Chicago School reasoning
- "consumer information failures" concerning what is going to happen in the aftermarket tend to undermine Chicago School reasoning
- worries about "science" vs. "art" of disclosures
Brian Bieron, Senior Director of Federal Affairs, eBay
- antitrust struggling to keep up with speed of Net development
- Internet is, or should, change some of the analysis
- new entry is important, but are new players just "free riders" on existing players?
- Still plenty of retail competition to the Net; players like eBay are not taking over
- Worried about Ticketmaster-Live Nation leveraging market power, especially with sports teams
Catherine Sandoval, Santa Clara University School of Law
- Relevant market still at heart of debate; what is compliment vs. substitute?
- Is there a "duty to deal" by incumbents?
- Retail price fixing now treated differently in U.S. than in Europe, where it is still regulated
- Recent Supreme Court decisions view of competition is "Hobbseian" (nasty, brutish, and short)
- Feels Supreme Court relies too heavily on faith in innovation to take place without; she thinks regulation needed to aid competitors
- Intel should pay more attention to what happened to Microsoft; learn lessons & change behavior
- Wants federal regulators to look at disclosure issues (ex: "unlimited data" claims & ETFs); says they keep consumers locked in