Don’t miss this interesting New York Times profile by David Streifield of the young lawyer Lina Khan, who is rethinking anti-trust theory, starting with the likes of Amazon. Some highlights:

 

In early 2017, when she was an unknown law student, Ms. Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal. Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention.

 

Over 93 heavily footnoted pages, she presented the case that the company should not get a pass on anticompetitive behavior just because it makes customers happy. Once-robust monopoly laws have been marginalized, Ms. Khan wrote, and consequently Amazon is amassing structural power that lets it exert increasing control over many parts of the economy.

Amazon has so much data on so many customers, it is so willing to forgo profits, it is so aggressive and has so many advantages from its shipping and warehouse infrastructure that it exerts an influence much broader than its market share. It resembles the all-powerful railroads of the Progressive Era, Ms. Khan wrote: “The thousands of retailers and independent businesses that must ride Amazon’s rails to reach market are increasingly dependent on their biggest competitor.”

Her Yale Law Journal paper argued that monopoly regulators who focus on consumer prices are thinking too short-term. In Ms. Khan’s view, a company like Amazon — one that sells things, competes against others selling things, and owns the platform where the deals are done — has an inherent advantage that undermines fair competition.
“The long-term interests of consumers include product quality, variety and innovation — factors best promoted through both a robust competitive process and open markets,” she wrote.The issue Ms. Khan’s article really brought to the fore is this: Do we trust Amazon, or any large company, to create our future? In think tanks and universities, the battle has been joined.

The paper got 146,255 hits, a runaway best-seller in the world of legal treatises. That popularity has rocked the antitrust establishment, and is making an unlikely celebrity of Ms. Khan in the corridors of Washington.

The battle for intellectual supremacy takes place less these days in learned journals and more on social media, where tongues are sharp and branding is all. This is not Ms. Khan’s strong suit. She is always polite, even on Twitter. One consequence is that she didn’t give much thought about what to call the movement to reboot antitrust. Neither did anyone else.

That presented an opening for the reformers’ critics, who have tried with a limited degree of success to popularize the term “Hipster Antitrust.” Konstantin Medvedovsky, an antitrust lawyer in New York, came up with the label last summer in a tweet that was responding to a tweet that was responding to a tweet by Ms. Khan.

“Antitrust Hipsterism,” he wrote. “Everything old is cool again.”

The April issue of the journal Antitrust Chronicle, edited by Mr. Medvedovsky, features a drawing of a bearded man on the cover right above the words “Hipster Antitrust.” In the middle of an article by Philip Marsden, a professor of competition law and economics at the College of Europe in Bruges, there’s a photograph of a bearded man taking a selfie next to the chapter heading “Battle of the Beards.” It is perhaps relevant that only one of the 12 authors or experts in the issue is female.

The Hipster issue was sponsored by Facebook, another sign that Big Tech is striving to shape the monopoly-law debate. The company declined to comment.

Things are moving fast, so there is a lot to write papers about.

 

 

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Posted by Carlos Alvarenga

Carlos A. Alvarenga is the Executive Director of World 50 Labs and Adjunct Professor in the Logistics, Business and Public Policy Department at the University of Maryland’s Robert E. Smith School of Business.

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