At the Blog
This week, we began a symposium on Root and Branch Reconstruction in Antitrust, which aims to set out affirmative principles for guiding the new antitrust.
On Monday, Sanjukta Paul introduced the symposium by reiterating the basic critique of the prevailing antitrust framework and laying out some of the key pillars for affirmative reform.
On Tuesday, Sandeep Vaheesan explained how strong anti-merger policy would encourage corporations to grow by expanding production capacity, instead of by engaging in (at best) zero-sum mergers. As an example of the public benefits of cracking down on corporate consolidation, he returns to the heady days of 2011, when the Obama Administration blocked AT&T’s acquisition of T-Mobile. The result, he writes, “was a multi-year period of healthy price competition and growth in the wireless market. Despite merger proponents predicting failure for T-Mobile and a dramatic increase in the price of cell phone service in the event AT&T did not acquire T-Mobile, the carrier thrived in the following years. T-Mobile slashed rates on voice and data, introduced new pricing options, and stopped imposing long-term contracts on customers…. In 2017, then-Federal Reserve Chair (and current Treasury Secretary) Janet Yellen attributed surprisingly low inflation at the time, in part, to ‘a large decline in quality-adjusted prices for wireless telephone services.'”
And on Thursday, Marshall Steinbaum laid out the antitrust case against gig economy labor platforms. To date, much of the fight against gig companies has involved arguing that they misclassify their workers as contractors. But what if we take gig companies at their word, and accept that their workers aren’t employees? Then it looks like much of their behavior—such as dictating the prices that drivers charge, concealing fare & destination data, employing minimum acceptance rates, and imposing de-facto non-compete clauses through non-linear pay—violates antitrust prohibitions on vertical restraints. As Steinbaum argues, “The purpose of bringing antitrust liability to bear on gig economy firms is to force them back into employment relationship: taking away their ability to exercise control in the absence of an employment relationship is a necessary condition for the success of any effort to curtail the gig economy and the threat it poses to worker power and to workers’ welfare.”